Yahoo Finance Will Wireline Revenue Woes Mar Verizon's (VZ) Q3 Earnings?
Verizon Communications Inc. VZ is scheduled to release third-quarter 2019 results before the opening bell on Oct 25. The company is likely to have recorded lower year-over-year revenues from the Wireline segment owing to secular pressure from legacy technologies.
Factors at Play
Over the past few quarters, Verizon has been facing decline in legacy wireline services due to competitive pressure from voice-over-Internet protocol service providers and aggressive triple-play (voice, data, video) offerings by the cable companies, a trend that most likely continued in the third quarter. Moreover, the company is losing Fios Video connections amid pressure from cord-cutting of video bundles as consumers are increasingly cancelling pay TV packages for cheaper streaming options from Netflix, Amazon, Hulu and other services. Consequently, secular and pricing pressure might have affected its Wireline revenues, undermining the overall quarterly performance.
Continued investments to build a single, highly-resilient and scalable fiber network for offering advanced data services to customers across consumer, business and enterprise customer groups are likely to have weighed on margins. Wireline EBITDA for the third quarter is expected to be $1,394 million, down 7.2% year over year.
The Zacks Consensus Estimate for revenues from the Wireline segment is pegged at $7,101 million, indicating a decline of 3.7% from the year-ago reported number. The lower revenue expectations can be attributed to soft demand and cheaper competitive options.
Total revenues for the company are expected to be $32,715 million. It generated revenues of $32,607 million in the prior-year quarter. The Zacks Consensus Estimate for earnings is currently pegged at $1.24 per share, implying a rise from $1.22 reported in the year-earlier quarter. (Read More: Can Wireless Strength Drive Verizon's Q3 Earnings?)
Earnings Whispers
Our proven model predicts an earnings beat for Verizon in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.40%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Verizon Communications Inc. Price and EPS Surprise
Verizon Communications Inc. price-eps-surprise | Verizon Communications Inc. Quote
Zacks Rank: Verizon has a Zacks Rank #2.
Other Stocks to Consider
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
AT&T T is set to release quarterly numbers on Oct 28. It has an Earnings ESP of +0.50% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for T-Mobile US, Inc. TMUS is +0.55% and it carries a Zacks Rank of 2. The company is set to report quarterly numbers on Oct 28.
The Earnings ESP for Sprint Corporation S is +27.78% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Oct 30.
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