American Tower Corp.
), world's largest communication tower operator, to beat
expectations when it reports its first-quarter 2013 results
before the market opens on May 1, 2013.
Why a Likely Positive Surprise?
Our proven model shows that AMT is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +6.25%. This is a
meaningful and leading indicator of a likely positive earnings
Zacks #3 Rank (Hold)
: AMT currently has a Zacks Rank #3. Note that the stocks with a
Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold) have a
significantly higher chance of beating the earnings.
The combination of AMT's Zacks Rank #3 (Hold) and +6.25% ESP
makes us confident of a positive earnings beat on May 1,
What is Driving the Better-Than-Expected
AMT is expected to benefit from the unprecedented demand for
wireless voice, data and video networks, which has propelled the
demand for tower space by carriers. Increased adaptation of
smartphones coupled with continuous amendment of the LTE networks
by the four major U.S. carriers will also help AMT to bolster its
top line in the first quarter.
In addition to Brazil and Mexico, AMT has taken a major
initiative to expand its operations in India. This will generate
a long-run sustainable business for the company.
Despite such strong fundamentals, AMT has a highly leveraged
balance sheet. This may act as a headwind for the company while
accessing the debt market to borrow and refinance at favorable
rates. Additionally, higher customer concentration and huge
exposure to foreign exchange risks may exert further pressure on
the company's profitability.
Other Stocks to Consider
Other companies you may consider on the basis of our model,
which have the right combination of elements to post an earnings
beat this quarter are as follows:
Research in Motion Limited
) currently has an Earnings ESP of +100.00% and holds a Zacks
Rank #2 (Buy).
) has an Earnings ESP of +4.08% and holds a Zacks Rank #3
Dish Network Corporation
) has an Earnings ESP of +1.89% and carries a Zacks Rank #3
AMER TOWER CORP (AMT): Free Stock Analysis
RESEARCH IN MOT (BBRY): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
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