Credit: Shutterstock photoCanadian telecommunication giant Rogers Communications Inc.RCI is scheduled to report its third-quarter 2015 financial numbers on Oct 22, before the opening bell.
Last quarter, Rogers Communications posted a 3.08% negative earnings surprise. In fact, the company's earnings have missed the Zacks Consensus Estimate in all of the last four quarters, which leads to an average miss of 11.66%. Let's see how things are shaping up ahead of this announcement.
Factors Likely to Influence this Quarter
Increased smartphone penetration, significant LTE network expansion, innovative service launches, strong cable subscriber growth, average revenue per unit improvement, wireless data service enhancement and strategic acquisitions should aid Rogers Communications' performance in the third quarter.
However, stiff competition from local carriers, a highly leveraged balance sheet and increasing customer churn are certain factors that may weigh upon the quarter's results.
Earnings Whispers
Our proven model does not conclusively show that Rogers Communications is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP : Rogers Communications has an earnings ESP of -3.13%. This is because the Most Accurate estimate stands at 62 cents while the Zacks Consensus Estimate is pegged higher at 64 cents.
Zacks Rank : Rogers Communications has a Zacks Rank #3 which increases the predictive power of ESP. However, the company's negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
CenturyLink, Inc. CTL has an earnings ESP of +6.15% and a Zacks Rank #1.
Cablevision Systems Corporation CVC has an earnings ESP of +13.64% and a Zacks Rank #3.
AT&T, Inc. T has an earnings ESP of +1.47% and a Zacks Rank #3.
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AT&T INC (T): Free Stock Analysis Report
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ROGERS COMM CLB (RCI): 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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