With the current reporting cycle drawing to an end, overall earnings growth remains elusive. As more companies report their quarterly numbers, the predictions of this quarter being the fifth straight quarter of an earnings decline seems more pertinent. As per the recent Earnings Preview, 433 out of the total S&P 500 companies’ earnings have declined by 4.1% on 0.9% lower revenues (as of Aug 5). Also, we expect earnings for the quarter to be down 3.5% from the same period last year on 0.4% lower revenues.
Additionally, third-quarter estimates are on a downward spiral too, indicative of the fact that the earnings recession will prevail through this quarter. However, we expect the effects of this downturn to subside in the fourth quarter and meaningful earnings growth to resume thereon.
Focus on Telecom Stocks:
The telecom industry – which comprises telecom operators and equipment manufacturers – is likely to witness reasonable growth through 2016. We believe that continuous advancement in technologies and adoption of newer business models are aiding this industry in improving its revenues.
We focus on four telecom stocks that are scheduled to report their quarterly financial results on Aug 11.
Acacia Communications, Inc. (NASDAQ:ACIA) designs, develops, manufactures and markets communication equipments. The company is scheduled to release its second-quarter 2016 results. It has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. This is because both Most Accurate estimate and the Zacks Consensus Estimate stand at 13 cents. We remind our investors that a combination of Zacks Rank #3 or better with a positive Earnings ESP makes us confident of an earnings beat. However, Acacia's Earnings ESP of 0.00% makes a surprise prediction difficult.
ACACIA COMMUNIC Price and EPS Surprise
ACACIA COMMUNIC Price and EPS Surprise | ACACIA COMMUNIC Quote
Viavi Solutions Inc. (NASDAQ:VIAV) provides software and hardware platforms and instruments for telecommunications service providers, wireless operators, cable operators, network-equipment manufacturers and enterprises. The company is scheduled to release its fourth-quarter fiscal 2016 results. It has a Zacks Rank #3 and an Earnings ESP of 0.00%.This is because both Most Accurate estimate and the Zacks Consensus Estimate are pegged at 6 cents. As stated above, we need a positive Earnings ESP to be confident of an earnings beat and hence Viavi Solutions doesn’t conclusively show that it is likely to beat the Zacks Consensus Estimate this quarter.
VIAVI SOLUTIONS Price and EPS Surprise
VIAVI SOLUTIONS Price and EPS Surprise | VIAVI SOLUTIONS Quote
VIAVI SOLUTIONS (VIAV): Free Stock Analysis Report
ACACIA COMMUNIC (ACIA): Free Stock Analysis Report
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