What Awaits Frontier Communications (FTR) in Q2 Earnings?

Frontier Communications Corporation FTR is scheduled to report second-quarter 2019 financial results on Aug 6, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 60%. Markedly, Frontier Communications surpassed the Zacks Consensus Estimate for earnings thrice in the trailing four quarters, the average beat being 19.7%.

The company is likely to report lower revenues on a year-over-year basis primarily due to decline in voice and video businesses. Nevertheless, it continues to focus on long-term goals of improving revenue and unit trends, while realizing its transformation program targets, driving free cash flow and reducing leverage.

Let’s find out how things are shaping up prior to the announcement.

The Zacks Consensus Estimate for revenues from the Customer segment, which accounts for the lion’s share of total revenues, is pegged at $1,978 million. It reported $2,065 million a year ago. Revenues from Subsidy are expected to be $91 million. It reported $97 million in the year-ago quarter.

Consequently, for the second quarter, the Zacks Consensus Estimate for total revenues stands at $2,065 million. It reported $2,162 million in the year-earlier quarter. Adjusted loss per share is pegged at 34 cents, down from loss of 80 cents reported a year ago.

What Our Model Says

Our proven model does not conclusively show that Frontier Communications is likely to beat earnings estimates this quarter as it does not possess one of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you’ll see below:

Earnings ESP: Frontier Communications’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at a loss of 34 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Frontier Communications Corporation Price and EPS Surprise

Frontier Communications Corporation Price and EPS Surprise

Frontier Communications Corporation price-eps-surprise | Frontier Communications Corporation Quote

Zacks Rank: Frontier Communications currently has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% Earnings ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

CACI International Inc CACI with an Earnings ESP of +4.02% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ciena Corp. CIEN with an Earnings ESP of +5.26% and a Zacks Rank #2.

Momo Inc. MOMO with an Earnings ESP of +1.35% and a Zacks Rank #3.

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