Leading Canadian telecom service provider TELUS Corporation TU is slated to release its third-quarter 2015 results before the market opens on Nov 5.
Last quarter, the company delivered a 5.88% positive earnings surprise. Moreover, the company’s bottom line has surpassed the Zacks Consensus Estimate in three of the past four quarters, with an average beat of 1.12%. Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that the company is likely to beat the Zacks Consensus Estimate because it has the right combination of two key ingredients.
Zacks ESP: TELUS has an earnings ESP of +4.26%. This is because the Most Accurate estimate is 49 cents while the Zacks Consensus Estimate stands lower at 47 cents. This is meaningful and a leading indicator of a likely positive earnings surprise.
Zacks Rank: TELUS has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of TELUS’s Zacks Rank #3 and +4.26% ESP makes us confident of an earnings beat at the company.
What is Driving the Better-than-Expected Earnings?
With the recent launch of the iPhone 6s and 6s Plus, TELUS has introduced for its iPhone customers an attractive AppleCare+ plan that allows flexible payment options and accidental damage coverage. We believe, the plan is a customer friendly move on TELUS’ part to capitalize on the burgeoning demand of the latest league of iPhones. This should naturally drive the company’s revenues higher.
With the Internet of Things (IoT) marketplace having made its way into Canada, TELUS is aiming to consolidate its foothold in the IoT market. It recently introduced TELUS Global IoT Connectivity platform to deliver seamless connectivity and simplified billing across 200 networks globally, to support the expansion of Canadian business enterprises.
Other Stocks to Consider
Here are some other companies that investors may consider as our model shows these too have the right combination of elements to post an earnings beat this quarter.
CenturyLink Inc. CTL, which has an earnings ESP of +1.45% and a Zacks Rank #2.
AT&T Inc. T, which has an earnings ESP of +1.61% and a Zacks Rank #1.
Sprint Corp. S, which has an earnings ESP of +11.11% and a Zacks Rank #2.
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