Leading Canadian telecom service provider TELUS Corporation (TU) is slated to report third-quarter 2014 results on Nov 6, before the opening bell.
In the previous quarter, TELUS had reported a positive earnings surprise of 7.4%. In fact, the company has outpaced the Zacks Consensus Estimate in all of the last four quarters with an average beat of 5.4%. Let’s see how things are shaping up for this announcement.
Factors at Play
TELUS continues to benefit from its leading wireless subscriber base, increased penetration of smartphones, improving churn rate, higher average revenue per unit, accelerating wireless data services and growing wireline fiber optic networks. The company expects balanced growth in its wireless and wireline businesses owing to its investments in high speed broadband technology and services and its Customer First strategy.
On the downside, the company faces fierce wireless competition from Rogers Communications and Bell, both of which enjoy national coverage in Canada and boast strong 3G networks. There is also competition from two small regional carriers, MTS in Manitoba and SaskTel in Saskatchewan.
Earnings Whispers?
Our proven model does not conclusively show that TELUS is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zero Zacks ESP: TELUS has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 54 cents.
Zacks Rank: TELUS carries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Rank #4 and 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 for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:
Lumos Networks Corp. (LMOS), earnings ESP of +15.39% and a Zacks Rank #2 (Buy).
CenturyLink, Inc. (CTL), earnings ESP of +1.61% and a Zacks Rank #3 (Hold).
Entravision Communications Corp. (EVC), earnings ESP of +22.22% and a Zacks Rank #3.
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