We expect U.S. prepaid carrier,
LEAP Wireless International Inc.
), to beat expectations when it reports second-quarter 2013
results on Aug 1, 2013, after the market closes.
Why a Likely Positive Surprise?
Our proven model shows that LEAP 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, stands at +6.06%. This
is very meaningful and a leading indicator of a likely positive
Zacks #3 Rank (Hold)
: LEAP currently has a Zacks Rank #3. Note that stocks with Zacks
Ranks #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly
higher chance of beating earnings.
The combination of LEAP's Zacks Rank #3 (Hold) and +6.06% ESP
makes us very confident of a positive earnings beat on Aug 1,
What is Driving the Better-Than-Expected
LEAP restructured its business model to stress on higher ARPU
generating smartphone subscribers, while eliminating the less
profitable wireless broadband subscribers. The company plans to
expand coverage in urban and suburban markets while avoiding less
populated areas to keep its infrastructural cost low, thus,
Additionally, LEAP has decided to launch an array of
attractive service plans coupled with various LTE based
smartphones, which are expected to boost subscriber growth.
However, continuous loss of subscribers coupled with significant
increase in promotional activities may affect profitability.
Other Stocks to Consider
Other companies you may want to consider on the basis of our
model which shows that they have the right combination of
elements to post an earnings beat this quarter are as
) currently has Earnings ESP of +1.39% and holds a Zacks Rank #2
Cablevision Systems Corp.
) has Earnings ESP of +40.00% and carries a Zacks Rank #3
American Tower Corp.
) has Earnings ESP of +3.77% and carries a Zacks Rank #3
AMER TOWER CORP (AMT): Free Stock Analysis
CBS CORP (CBS): Free Stock Analysis Report
CABLEVISION SYS (CVC): Free Stock Analysis
LEAP WIRELESS (LEAP): Free Stock Analysis
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