CenturyLink, Inc. (CTL) is scheduled to report its fourth-quarter 2014 financial numbers after the closing bell on Feb 11.
In the last reported quarter, the company had delivered a positive earnings surprise of 1.6%. Notably, the company surpassed the Zacks Consensus estimate in all of the last four quarters with a positive earnings surprise of 9.4%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
We believe that strength in products such as high-speed Internet, high bandwidth data services, Prism TV, and managed hosting services remains a key growth driver for the company. In addition, a realigned business structure is likely to reap beneficial results in the coming quarters.
On the downside, deteriorating legacy voice and access revenues owing to wireless substitution, cash flow pressure, federal regulations, labor issues and the constant need to upgrade technology are some of the major risks the company is faced with.
Earnings Whispers?
Our proven model does not conclusively show that CenturyLink 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, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: CenturyLink’s Earnings ESP stands at 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 63 cents.
Zacks Rank: CenturyLink carries a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.
Notably, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
Juniper Networks, Inc. (JNPR) with an Earnings ESP of +4.76% and a Zacks Rank #1 (Strong Buy).
Comcast Corporation (CMCSA) with an Earnings ESP of +1.30% and a Zacks Rank #3.
Cablevision Systems Corporation (CVC) with an Earnings ESP of +11.11% and a Zacks Rank #3.
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