Limelight (LLNW) to Report Q2 Earnings: What's in the Cards?

Limelight Networks LLNW is scheduled to report second-quarter 2020 results on Jul 20.

Over the trailing four quarters, the company’s earnings came in line with the Zacks Consensus Estimate on two occasions, beat in another and missed in the other, the average negative surprise being 25%.

In the last reported quarter, the company reported break-even adjusted earnings per share, which compared favorably with the Zacks Consensus Estimate of loss of a penny. Earnings were also better than the year-ago quarter’s loss per share of 4 cents.

Similarly, first-quarter 2020 revenues of $57 million increased 32% year over year and surpassed the Zacks Consensus Estimate of $54 million.

Limelight Networks, Inc. Price and Consensus

Limelight Networks, Inc. Price and Consensus

Limelight Networks, Inc. price-consensus-chart | Limelight Networks, Inc. Quote

For the second quarter, the Zacks Consensus Estimate for revenues is pegged at $57.04 million, suggesting a 24.3% increase, year over year. The consensus mark for earnings is pinned at a penny, indicating solid improvement from the year-ago quarter’s loss per share of 3 cents.

Let’s see how things have shaped up prior to this announcement.

Factors Likely to Have Influenced Q2 Performance

Limelight networks offers a content delivery network (scalable platform for its media partners that offer their Internet, entertainment, software and technology content to global customers through the network), thus, helping monetize their digital assets.

Lockdown measures due to the coronavirus pandemic are likely to have driven Internet traffic during the quarter under review. Moreover, as people are staying indoors, there is strong growth in demand for High Definition video over the Internet. This is driving bandwidth requirements, which is expected to have accelerated demand for the company’s solutions and aided revenues.

Significant demand for OTT video services as well as software and gaming downloads is likely to have driven traffic for Limelight Networks’ platform, which, in turn, is expected to have boosted revenues.

Additionally, robust adoption of its edge cloud and cloud storage offerings is likely to have supported the second-quarter performance. As the demand for offsite-working and online learning increases due to the lockdown measures, companies offering remote-working software and services are witnessing massive demand.

Furthermore, a huge global workforce is working remotely, in an effort to contain the spread of coronavirus. However, an increasing number of people logging into employers' networks has been triggering a greater need for security. This trend might have had spurred demand for Limelight Networks’ cloud security services in the June-end quarter.

What Our Model Says

Our proven model does not predict an earnings beat for Limelight Networks this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Limelight Networks currently carries a Zacks Rank of 2 but has an Earnings ESP of -249.99%.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their soon-to-be-reported quarterly results:

Synaptics SYNA has an Earnings ESP of +10.6% and sports a Zacks Rank of 1, at present.You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook FB has an Earnings ESP of +8.81% and currently carries a Zacks Rank of 3.

Alphabet GOOGL has an Earnings ESP of +3.73% and carries a Zacks Rank of 3, currently.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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