Yahoo Finance Can These 3 Wireless Equipment Stocks Hit Earnings Targets?
A faster pace of 5G deployment is expected to augment the telecommunications industry's scalability, security and universal mobility and propel the wide proliferation of IoT. Expansion of fiber optic networks by carriers to support their 4G LTE and 5G wireless standards, as well as wireline connections, are likely to act as additional tailwinds.
The Wireless Equipment firms are facilitating their customers to move away from an economy-of-scale network operating model to demand-driven operations and seamlessly migrate to 5G by offering easy programmability and flexible automation through steady infrastructure investments. The wide proliferation of cloud networking solutions is further resulting in increased storage and computing on a virtual plane. As both consumers and enterprises use the network, there is tremendous demand for quality networking equipment.
The Wireless Equipment industry is housed within the broader Zacks Computer and Technology sector. Per the latest Earnings Trends report, Total Technology sector earnings are expected to grow 20% in the January-March quarter on 8.2% higher revenues, following earnings growth of 27.5% on 8.8% higher revenues in fourth-quarter 2023. The Tech sector is expected to maintain its growth momentum through the remainder of 2024 backed by improving sector dynamics.
A couple of Wireless Equipment stocks, namely Ericsson ERIC and Nokia Corporation NOK, have already reported first-quarter earnings. Ericsson reported mixed results, wherein the bottom line surpassed the Zacks Consensus Estimate, but the top line missed the same. While lower sales in the South East Asia and Oceania region and the normalization of 5G investments in India affected the top line, solid expansion in gross margin backed by cost-saving measures, commercial discipline and a competitive portfolio were tailwinds.
Nokia followed a similar story with the bottom line surpassing the consensus estimate but the top line missing the same. The company reported a top-line contraction year over year owing to sluggish demand trends in multiple verticals, while improved margins due to lower operating expenses buoyed the bottom line.
Some leading Wireless Equipment companies are lined up to report their quarterly numbers this week. Let's see how things have shaped up for Qualcomm Incorporated QCOM, Motorola Solutions, Inc. MSI and InterDigital, Inc. IDCC ahead of their quarterly releases.
Qualcomm is slated to report second-quarter fiscal 2024 results on May 1 after the closing bell. In the last reported quarter, the company beat the Zacks Consensus Estimate by 37 cents. The chip-making firm is expected to have recorded a top-line expansion year over year, backed by solid 5G traction, greater visibility and a diversified revenue stream.
The Zacks Consensus Estimate for total revenues for the company stands at $9,301 million. It generated revenues of $9,275 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.30 per share, indicating growth from $2.15 in the year-earlier quarter.
Our proven model predicts an earnings beat for QCOM for the fiscal second quarter. 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. The company has an Earnings ESP of +0.11% and a Zacks Rank #2.
QUALCOMM Incorporated Price and EPS Surprise
QUALCOMM Incorporated price-eps-surprise | QUALCOMM Incorporated Quote
Qualcomm is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge with a diversified revenue stream. It is witnessing healthy traction in EDGE networking that helps to transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets.
Qualcomm believes it is on track to become the largest smartphone RF front-end supplier by revenues in the near future. It intends to harness artificial intelligence to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy. Qualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio. (Read more: Is Qualcomm (QCOM) Stock Worth Buying Ahead of Q2 Earnings?)
Motorola is scheduled to report first-quarter 2024 results on May 2, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 6.6%, on average, beating the earnings estimates on each occasion.
The Chicago, IL-based company is expected to have recorded year-over-year higher revenues in the first quarter on the back of growth in both segments — Products and Systems Integration and Services and Software. It benefits from the increasing demand for its mission-critical technologies in North America and globally.
The Zacks Consensus Estimate for total revenues for the company stands at $2,344 million. It generated revenues of $2,171 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.52 per share, indicating growth from $2.22 in the year-earlier quarter. MSI has an Earnings ESP of -0.05% and a Zacks Rank #3.
Motorola Solutions, Inc. Price and EPS Surprise
Motorola Solutions, Inc. price-eps-surprise | Motorola Solutions, Inc. Quote
Motorola expects to record strong demand across video security and services, land mobile radio products and related software while benefiting from a solid foundation. These systems drive the demand for additional device sales and promote software upgrades and infrastructure expansion. The comprehensive suite of services ensures continuity and reduces risks related to critical communications operations. (Read more: Is Motorola (MSI) a Good Investment Bet Ahead of Q1 Earnings?)
InterDigital is scheduled to report first-quarter 2024 results on May 2, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 170.5%, on average, beating the earnings estimates on each occasion.
The company is expected to have recorded year-over-year higher revenues in the first quarter on the back of healthy demand trends. The Zacks Consensus Estimate for total revenues for the company stands at $216 million. It generated revenues of $202 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $3.37 per share, indicating a decline from $4.21 in the year-earlier quarter. IDCC has an Earnings ESP of 0.00% and a Zacks Rank #3.
InterDigital, Inc. Price and EPS Surprise
InterDigital, Inc. price-eps-surprise | InterDigital, Inc. Quote
InterDigital’s global footprint, diversified product portfolio and ability to penetrate different markets are impressive. Apart from the company’s strong portfolio of wireless technology solutions, the addition of technologies related to sensors, user interface and video to its offerings is likely to drive significant value, considering the massive size of the market it licenses. Furthermore, InterDigital remains committed to pursuing acquisitions to drive its product portfolio and boost organic growth.
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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Ericsson (ERIC) : Free Stock Analysis Report
Nokia Corporation (NOK) : Free Stock Analysis Report
Motorola Solutions, Inc. (MSI) : Free Stock Analysis Report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
