Latin American telecom operator
NII Holdings Inc.
) is scheduled to report its second-quarter 2014 financial numbers
after the closing bell on Aug 11.
In the previous quarter, the company's earnings came in line
with the Zacks Consensus Estimate. Let's see how NII Holdings
is positioned prior to the second-quarter earnings
Factors to be Considered this Quarter
Higher churn, weaker exchange rate, lower average revenue per
user (ARPU), increase in operating expenses, stiff competition in
the Latin American markets and a higher interest expenses may act
as headwinds for the company in the coming quarters. In
first-quarter 2014,NII Holdings lost 52,000 subscribers against a
gain of 111,800 subscribers in the prior-year quarter. The customer
churn was attributable to significant subscriber loss in Mexico. We
not expect the situation to improve much in the second quarter as
Our proven model does not conclusively show that NII Holdingsis
likely to beat earnings this quarter. This is because a stock needs
to have both a positive
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to
happen. Unfortunately, this is not the case here as elaborated
Both the Most Accurate estimate and the Zacks Consensus Estimate
are poised at a loss of $2.39. Hence, the ESP is 0.00%.
NII Holdings' Zacks Rank #4 (Sell) further decreases the predictive
power of ESP.
We caution investors against the stock as Sell-rated stocks (#4
and 5) should ideally never be considered going into an earnings
announcement, especially when the company is seeing a negative
estimate revision momentum.
Other Stocks to Consider
Here are some companies you can consider instead as our model
shows these have the right combination of elements to post an
earnings beat this quarter:
CatchMark Timber Trust, Inc. (
) with earnings ESP of +50.00% and a Zacks Rank #2.
Infosys Ltd. (
) with earnings ESP of +1.24% and a Zacks Rank #2.
Computer Sciences Corporation (
) with earnings ESP of +0.95% and a Zacks Rank #3.
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