The Latin American telecom operator,
NII Holdings Inc.
) is slated to report fourth-quarter 2013 earnings before the
opening bell on Feb 28, 2014.
In the last quarter, the company missed the Zacks Consensus
Estimate by a margin of 25.0%. Let's see how things are shaping
up for this announcement.
Factors to be Considered this Quarter
Recently, NII Holdings failed to establish its iDEN
walkie-talkie based phone service as a potential replacement of
other digital technology formats, such as GSM and CDMA, used by
mobile-phone giants in Mexico.
The company is facing severe competitive threat from America
Movil S.A.B. de C.V. and Telef. These companies are aggressively
deploying 3G wireless technologies in major Latin American
markets, offering faster download speeds for smartphones. This is
resulting in significant customer churn for NII Holdings.
In Dec 2013, NII Holdings decided to retrench workforce at its
headquarter by over 25% along with eliminating over 1,400
manpower in marker operations. This restructuring process is
aimed to streamline management's structure, which is expected to
improve efficiency and reduce costs by $50-$55 million per annum.
Our proven model does not conclusively show that NII Holdings is
likely to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately,
this is not the case here as elaborated below.
This is because the Most Accurate estimate stands at a loss of
$1.89 while the Zacks Consensus Estimate is lower at a loss of
$1.74. This leads to an ESP of -8.62% for NII Holdings.
NII Holdings' Zacks Rank #4 (Sell) further decreases the
predictive power of ESP.
We caution investors against the stock going into the earnings
announcement, as a Zacks earnings ESP of -8.62% combined with a
Zacks Rank #4 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some companies to consider as our model shows these
have the right combination of elements to post an earnings beat
) has earnings ESP of +3.57% and carries a Zacks Rank #3
Grupo Televisa, S.A.B.
) has earnings ESP of +10.53% and carries a Zacks Rank #3.
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Liberty Media Corporation
) has earnings ESP of +62.96% and carries a Zacks Rank #3.