Lumen Technologies, Inc. LUMN is scheduled to report fourth-quarter 2020 results after the closing bell on Feb 10. In the last reported quarter, the company delivered a positive earnings surprise of 29%, surpassing the Zacks Consensus Estimate by 9 cents. In the fourth quarter, the company is likely to have generated lower consolidated revenues on a year-over-year basis due to the coronavirus-induced turmoil.
Factors at Play
Lumen expanded its cloud-based hosted unified collaboration solution with Cisco (NASDAQ:CSCO) (dubbed Cisco Hosted Collaboration Solution) to Europe, the Middle East, Asia and Pacific regions, offering simplified IP-based voice, video and messaging services. It also upgraded its industry-leading DDoS (distributed denial of service) Mitigation Service to better protect customers against potential cyber-attacks and reduce the risk of collateral damage.
In order to further improve data security, Lumen introduced Data Access Accelerator during the fourth quarter that facilitated unstructured, file-based data to be acquired and processed from different locations for enhanced productivity with near real-time file access. Moreover, it launched Lumen Edge Compute that harnesses the power of its expansive global fiber network, on-demand networking, and integrated security to enable quick and efficient deployment of applications and workloads at the edge, closer to the action for low-latency, secure and scalable capabilities.
During the to-be-reported quarter, Lumen collaborated with Zoom Video Communications (NASDAQ:ZM), Inc. for an improved video communication platform and for augmenting end-user experience across the digital platform. The offering titled ‘Zoom delivered by Lumen’ capitalizes on Lumen’s embedded network security features with Zoom’s built-in security to deliver enhanced safety traits that proactively protect end users from cyber threats. All these positives are likely to be reflected in the upcoming results.
However, Lumen is likely to witness top-line contraction due to the substitution of its traditional wireline telephone services by wireless and other competitive low-priced offerings amid economic adversities led by the virus outbreak. The Zacks Consensus Estimate for total revenues for the fourth quarter is pegged at $5,126 million. In the year-earlier quarter, it generated adjusted revenues of $5,306 million. The consensus mark for earnings is currently pegged at 32 cents per share, indicating a slight decline from 33 cents reported in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for Lumen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lumen currently has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Telephone and Data Systems, Inc. TDS is set to release quarterly numbers on Feb 18. It has an Earnings ESP of +309.09% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Cambium Networks (NASDAQ:CMBM) Corporation CMBM is +6.75% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 18.
The Earnings ESP for Arista Networks (NYSE:ANET), Inc. ANET is +0.76% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 18.
(We are reissuing this article to correct a mistake. The original article, issued on February 8, 2021, should no longer be relied upon.)
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