Credit: For Immediate Release
Chicago, IL - March 12, 2018 - Zacks Equity Research highlights United States Cellular Corp USM as the Bull of the Day, Cincinnati Bell CBB as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dick's Sporting Goods, Inc. DKS , Dollar General CorporationDG and Ulta Beauty Inc.ULTA .
Here is a synopsis of all five stocks:
United States Cellular Corp , a Zacks Rank #1 (Strong Buy), is the eighth largest wireless company in the United States, based on the aggregate number of customers in its consolidated markets. The company's development strategy is to operate controlling interests in cellular market licensees in areas adjacent to or in proximity to its other markets, thereby building clusters in operating markets.
Recent Earnings Uptick
On February 23rd, USM reported earnings where they easily beat both the Zacks consensus earnings and revenue estimates. The company posted significant gains in EPS, reporting $0.05 compared to -$0.07 in the year ago quarter, and revenues improved by +13%. The Q4 results marked the first time the company posted year over year gains in revenues in 2017 as the company saw price increases in one of its entry level plans, and its unlimited data plans.
Further, USM realized an improvement in its device protection plans, and an increase of its customer base on installment plans. Also, management's cost cutting initiatives along with positive subscriber results aided the top line.
Looking forward, the company is expanding its Voice over LTE (VoLTE) coverage outside its current presence in Iowa and Wisconsin over the next couple of years. This is expected to help its high-margin roaming revenues. Further, the upcoming rollout of FirstNet is anticipated to improve revenues for the tower segment above the +5% growth seen in 2017.
Management's Take
According to Kenneth R. Meyers, President and CEO, " We made significant progress on the strategic imperatives we set for 2017. With the success of our Total Plans, which include an unlimited data option and no hidden fees, we were able to grow our customer base through the powerful combination of new customer additions and increased loyalty and customer engagement.
"Through a company-wide initiative to better align costs with our strategic imperatives, we were able to reduce expenses by some $100 million in 2017 and, importantly, identify and implement programs to generate additional savings in 2018 and beyond. This extensive attention on costs allowed us to offset a decline in revenues caused by competitive pricing pressures and generate a modest increase in profitability ."
Cincinnati Bell , a Zacks Rank #5 (Strong Sell), provides integrated communications solutions -- including local and long distance voice, data, high-speed Internet and video -- that keep residential and business customers in Greater Cincinnati and Dayton connected with each other and with the world. In addition, enterprise customers across the United States rely on CBTS, a wholly-owned subsidiary, for efficient, scalable office communications systems and end-to-end IT solutions.
Recent Earnings Data
In the company's most recent earnings report, they missed both the Zacks consensus earnings and revenue estimates. EPS fell from $0.01 in December of 2016 to -$0.18 in December of 2017. But revenues grew by +49.8% on a year over year basis.
The drag on the results was twofold, first, Q4 IT hardware sales fell by -12.8% YoY (excluding the recent OnX acquisition) as one of its largest customers scaled back spending. Second, increased competition from Spectrum, who has been increasing its marketing in the Cincinnati area, and has offered very competitive pricing.
Looking forward, CBB is in the process of acquiring Hawaiian Telcom which is expected to keep capex elevated, and debt financing at levels that will negatively impact organic free cash flows over the near term. While the Hawaiian acquisition is expected to be beneficial in the long term, it will put pressure on the company over the next quarter or two.
Management's Take
According to Leigh Fox, President and CEO, " Our strong full year performance demonstrates the solid progress we have made in executing our growth strategy. This was an important year for Cincinnati Bell as we focused on building two distinct, complementary lines of business with expanded geographic reach, customer diversification and increased runway for growth. Central to this strategy has been the previously announced mergers with OnX and Hawaiian Telcom.
"These combinations bring meaningful scale to their respective businesses and position us to capitalize on the fast-growing demand for strategic fiber and cloud services offerings. We have successfully completed the acquisition of OnX and integration efforts continue to progress well. I am also pleased to report that we received overwhelming support from Hawaiian Telcom shareholders and the pending merger has made significant headway in gaining the necessary regulatory approvals ."
Additional content:
Upcoming Retail Earnings Reports to Watch: DKS, DG, ULTA
Stocks opened higher on Friday after the February jobs report came in ahead of expectations and cooled concerns about rising inflation. But as the latest employment numbers seemingly confirm the overall health of the U.S. economy, recent earnings results in the retail sector have started to raise questions about the state of consumer spending.
For the most part, fourth-quarter earnings season was relatively strong. However, results in the retail space were somewhat mixed. Total earnings growth from the sector's S&P 500 members broke 9% on the back of 9.6% higher revenues, which is an impressive trend.
But of the 195 companies in our "Retail and Wholesale" that have reported so far, only 56% have managed to surpass earnings estimates-and over the past few days, we have seen disappointing reports from Kroger, Costco, Dollar Tree and more (also read: Kroger Extends Disappointing Week for Retail Sector Earnings Reports ).
The traditional earnings season is effectively over, but a few marquee reports-especially in the retail sector-remain to be released. Investors should remember that they can always use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases. This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.
Today, we've made that task even easier for you. Using the Earnings Calendar, we looked ahead to next week and selected most-important retail reports to watch. Make sure to keep an eye on these companies as they prepare to report during the week of March 12!
1. Dick's Sporting Goods, Inc.
Sporting goods retailer Dick's is scheduled to release its latest quarterly financial results before the market opens on March 13. Dick's recently grabbed headlines for its decision to change its own gun sales rules in the wake of several mass shootings, but now investors will want to see how the company has actually been performing lately.
DKS is currently sporting a Zacks Rank #2 (Buy). Based on our latest Zacks Consensus Estimate, we expect the company to report adjusted earnings of $1.20 per share, down about 9% year over year. However, total quarterly revenues are expect to improve nearly 10% to touch $2.73 billion.
2. Dollar General Corporation
Discount retail giant Dollar General is slated to post its most recent quarterly earnings report before the opening bell on March 15. The pressure will be on the company after fellow "dollar store" retailer Dollar Tree failed to impress this week. DG is currently holding a Zacks Rank #2 (Buy).
Our latest Zacks Consensus Estimates are calling for adjusted earnings of $1.48 per share and revenues of $6.22 billion. This earnings results would be basically flat year over year, while the revenue projection would mark a 3.5% improvement. The key for Dollar General will be whether or not its core customer base-lower income families-have started to feel a noticeable tax break and have been spending the extra money for shopping purposes.
3. Ulta Beauty Inc.
Beauty retailer Ulta is expected to report its latest quarterly financial results after the market closes on March 15. Ulta was a Wall Street darling for most of 2016 thanks to strong comps and EPS growth, but the stock struggled last year as growth rates began to slow a bit. However, the company still has plenty of attractive growth opportunities.
Ulta is holding a Zacks Rank #2 (Buy). According to our latest Zacks Consensus Estimates, the company is expected to report adjusted earnings of $2.77 per share and revenues of $1.94 billion. These results would both represent year-over-year growth of about 23%.
Want more market analysis from this author? Make sure to follow @ Ryan_McQueeney on Twitter!
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Cincinnati Bell Inc (CBB): Free Stock Analysis Report
Dollar General Corporation (DG): Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS): Free Stock Analysis Report
Ulta Beauty Inc. (ULTA): Free Stock Analysis Report
United States Cellular Corporation (USM): 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.
