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Telecom Stocks' Q4 Earnings to Watch on Feb 24: SATS, USM

We are at the tail end of the fourth-quarter 2016 earnings season. As per the latest Earnings Preview , 411 S&P 500 members (accounting for 82.2% of the index's total membership) have reported their fourth-quarter earnings results as of Feb 17. Total earnings for these 411 index members are up 8% on 4.9% higher revenues, with 68.9% beating EPS estimates and 54.7% coming ahead of top-line expectations. Results from only about 18% of the S&P 500 members are still under wraps.

Per the preview report, the fourth-quarter earnings season has surprisingly turned out to be a good one. Along with growth on track to be the highest in two years, total earnings for the quarter are also likely to set a new record. Significantly, this improvement is a result of strong gains in actual earnings. In fact, the overall tally of fourth-quarter earnings for the S&P 500 index is on track to reach an all-time record, surpassing the previous record achieved in the fourth quarter of 2014.

In this reporting cycle, we anticipate the pace of growth to improve steadily. In fact, our latest data projects that earnings for the S&P 500 companies are now on track to grow 7.4% from the year-ago period on 3.9% higher revenues. This compares favorably with earnings growth of 3.7% on 2.2% higher revenues in the previous quarter,.

Computer and Technology Sector at a Glance

The Computer and Technology industry is one of the broader sectors of the 16 Zacks sectors that are expected to see earnings growth in the fourth quarter. Our latest article states that for the Technology sector, we already have fourth-quarter results from 94.1% of its total market cap. Total earnings for these companies are up 8.7% from the same period last year on 6% higher revenues, with 74.1% beating EPS estimates and 74.1% beating revenue estimates. Furthermore, the telecom space has already seen heavyweights like Verizon Communications Inc. VZ , AT&T Inc. T and T-Mobile US reporting their fourth-quarter 2016 earnings in the beginning of this season.

The performance this season has been reasonably better than what was witnessed in the preceding four quarters. However, the reported figures are almost in line with the 12-quarter average. Revenue growth, on the other hand, is above historical levels. The outperformance is in terms of positive surprises as well, with the proportion of Tech sector positive surprises notably tracking above Q3, the 4-quarter and 12-quarter averages.

We further predict that earnings in the Computer and Technology space should be on track to rise 9.0% on 4.4% higher revenues from last year.

Meanwhile, CommScope Holding Company, Inc. COMM , Acacia Communications, Inc. , InterDigital, Inc. ,Cogent Communications Holdings, Inc. and BroadSoft, Inc. are slated to report their fourth-quarter numbers on Feb 23.

Telecom Stocks to Release Q4 Earnings

Let's see what's in store for these telecommunication companies that are expected to report their fourth-quarter numbers on Feb 24.

United States Cellular Corp.USM is the eighth largest wireless company in the United States, based on the aggregate number of customers in its consolidated markets.Itis the wireless subsidiary of Telephone & Data Systems Inc. TDS , a leading provider of telecommunications services.

The company has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00% (Most Accurate estimate and Zacks Consensus Estimate stand at a loss of 8 cents). You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Last quarter, the company posted a negative earnings surprise of 13.04%. However, the company's earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of a stellar 28.51% (read more: Will U.S. Cellular Disappoint this Earnings Season? ).

United States Cellular Corporation Price and EPS Surprise

United States Cellular Corporation Price and EPS Surprise | United States Cellular Corporation Quote

EchoStar CorporationSATS is a global satellite services provider and developer of hybrid video delivery technologies. It is the owner and operator of the satellite fleet for closely affiliated Dish Network Corp. DISH .

In the last quarter, the company's earnings matched the Zacks Consensus Estimate. The company's earnings surpassed the consensus mark in three of the previous four quarters, with an average beat of 32.67%.

EchoStar Corporation has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 41 cents. However, the company's Zacks Rank #3 increases the predictive power of ESP, but we also need to have a positive ESP to be confident about an earnings surprise. You can see the complete list of today's Zacks #1 Rank stocks here.

EchoStar Corporation Price and EPS Surprise

EchoStar Corporation Price and EPS Surprise | EchoStar Corporation Quote

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AT&T Inc. (T): Free Stock Analysis Report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

Telephone and Data Systems, Inc. (TDS): Free Stock Analysis Report

EchoStar Corporation (SATS): Free Stock Analysis Report

DISH Network Corporation (DISH): Free Stock Analysis Report

United States Cellular Corporation (USM): Free Stock Analysis Report

CommScope Holding Company, Inc. (COMM): Free Stock Analysis Report

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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.


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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