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Very Different Expectations For CenturyLink And Frontier Communications Earnings

Very Different Expectations For CenturyLink And Frontier Communications Earnings - CenturyLink, Inc. NYSE:CTL, Frontier Communications Corporation NASDAQ:FTR
  • Upcoming earnings highlights include the latest results from two of the nation's leading local exchange carriers.
  • Wall Street analysts are looking for earnings growth from just one of them.
  • However, both telecoms have topped earnings expectations in recent quarters.

Two of the largest telephone and broadband internet services providers in the United States are among those companies expected to take their turns on the earnings stage this week. However, the expectations on Wall Street are very different for Centurylink Inc CTL 1.98% and Frontier Communications Corp FTR 2.16%.

Wall Street's consensus forecast for Louisiana-based CenturyLink is for earnings per share to have risen by a nickel from the same period of last year to $0.60. That estimate was a penny lower 60 days ago. The consensus of 17 Estimize respondents calls for $0.61 for the period that ended in June. Note that both Wall Street and Estimize underestimated EPS results in the past three quarters.

Estimize predicts CenturyLink's revenue for the quarter will total $4.42 billion, or about the same as in the year-ago period. Wall Street is a bit more pessimistic, with its consensus forecast set at $4.39 billion. But revenue fell well short of both forecasts back in the first quarter.

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When Connecticut-based Frontier, primarily a rural local exchange carrier (RLEC), shares its second-quarter results, the Wall Street forecast is that it will post a net loss of $0.03 per share and $2.74 billion in revenue. That would be quite a change from the profit of $0.03 share and revenue of $1.37 billion last year. And it also would be the lowest EPS results and highest revenue in the past eight quarters.

The consensus of nine Estimize respondents pegs the net loss at $0.03 per share as well, and on revenue of $2.75 billion, for the three months that ended in June. Note that while both Estimize and Wall Street anticipated net losses in the previous two quarters, Frontier managed to deliver small per-share profits both times. And Wall Street so far sees strong revenue growth again in the current quarter and for the full year.

Frontier is scheduled to report its results after the closing bell on Monday, while CenturyLink is expected to post its numbers after trading concludes on Wednesday.

Of course, as the second-quarter reporting period is still in full swing, CenturyLink and Frontier will be joined by many others in reporting their latest quarterly results. Other companies that Wall Street analysts expect to show at least some earnings growth when they report this week include Activision Blizzard, Aetna, CVS Health, Humana, LinkedIn, MGM Resorts, Pfizer, 3D Systems and Williams Companies.

The consensus forecasts call for per-share earnings at ADM, Avis Budget, Avon Products, Dominion Resources, First Solar, Fitbit, Herbalife, Kellogg, MetLife, Mosaic, Nokia, Procter & Gamble, Seagate Technology, Tenet Healthcare, Time Warner and Twenty-First Century Fox to be smaller than a year ago.

A net loss is in the cards for Devon Energy, Electronic Arts, FireEye, Marathon Oil, Occidental Petroleum, Take-Two Interactive Software and Tesla Motors, if the analysts are correct.

At the time of this writing, the author had no position in the mentioned equities.

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