Lumen Technologies, Inc LUMN is scheduled to report third-quarter 2024 results on Nov. 5.

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The Zacks Consensus Estimate for total revenues is pegged at $3.2 billion, indicating a fall of 12% from a year ago. The consensus estimate for earnings is currently pegged at a loss of 5 cents per share. In the year-ago quarter, LUMN reported a loss of 9 cents per share.

The company missed the Zacks Consensus Estimate in three of the last four quarters and beat once. It has a trailing four-quarter earnings surprise of 9.73%, on average. In the past year, shares of LUMN have gained 502.8% compared with the sub-industry’s growth of 47.2%.

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Factors to Note for LUMN’s Q3 Performance

Continued investment in Quantum Fiber and enterprise business is a tailwind. The company added 40,000 Quantum fiber subscribers, taking the count to 992,000 in the reported quarter. In the second quarter, total enablements were approximately 136,000. As of June 30, 2024, the total enabled locations in the retained states stood at 3.9 million. The company has been targeting 500,000 enabled locations in 2024.

Improving logo sales across North America’s large enterprise and mid-market is likely to have cushioned top-line performance. 

Momentum in security, cloud, unified communications and IT products is likely to have provided some cushioning to the top-line performance. The recent launch of private connectivity solutions and other new digital offerings bode well. Amid the rapid proliferation of AI, Lumen's strategic investments in fiber infrastructure position it well to make the most of the growing demand for data center connectivity. 

Management has been also focusing on cost discipline and shutting down non-value-added processes, which are likely to have provided some support to the bottom line.

Lumen Technologies, Inc. Price and EPS Surprise

Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. Quote

LUMN has been undergoing a time-consuming digital transformation process. Weakness in the Business and Mass Markets segments owing to divestitures, commercial agreements and the sale of the CDN business is likely to have remained an overhang. 

Apart from a time-consuming business transformation endeavor, uncertainty prevailing over global macroeconomic conditions, forex volatility and inflationary pressure are also likely to have negative impacts on Lumen’s third-quarter revenues. Massive debt is another headwind.

Recent Developments in LUMN

On Oct. 30, 2024, Lumen partnered with Amazon to boost data center connectivity and enhance network delivery of cloud technologies. LUMN will leverage Amazon Web Service tech (including AI and machine learning) to upgrade its applications and systems. In turn, the company will provide fiber connectivity to AWS data centers to aid enterprise clients in building and delivering scalable AI applications across AWS local zones and AWS regions.

On Oct. 21, 2024, Lumen partnered with Meta Platforms to elevate the latter’s network capabilities. The expanded network will deliver a dedicated interconnection for Meta's cutting-edge infrastructure. As interest in AI rises, investing in a dependable network is essential for the future. Meta's AI tools handle complex tasks like multilingual conversations and real-time text-to-image translation, enhancing how users interact with their surroundings. This collaboration will deliver safe on-demand bandwidth to Meta, which will boost its ability to innovate in AI and deliver an improved experience for its users.

Earnings Whispers for LUMN

Our proven model does not conclusively 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 odds of an earnings beat. This is not the case here. 

LUMN currently has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks 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.

BlackSky Technology Inc. BKSY currently has an Earnings ESP of +29.51% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. 

BKSY is scheduled to report quarterly earnings on Nov. 7. The Zacks Consensus Estimate for BKSY’s to-be-reported quarter’s bottom line is pegged at a loss of 61 cents. The consensus estimate for revenues is pegged at $26.9 million. Shares of BKSY have lost 31.9% in the past year.

Yelp Inc. YELP presently has an Earnings ESP of +15.48% and a Zacks Rank #1. YELP is scheduled to report quarterly numbers on Nov. 7. The Zacks Consensus Estimate for YELP’s to-be-reported quarter’s earnings and revenues is pegged at 40 cents per share and $362.1 million, respectively. Shares of YELP have lost 20.2% in the past year.

Fortinet, Inc. FTNT has an Earnings ESP of +1.25% and a Zacks Rank #1 at present. Fortinet is scheduled to report quarterly figures on Nov. 7. The Zacks Consensus Estimate for FTNT’s to-be-reported quarter’s earnings and revenues is pegged at 51 cents per share and $1.48 billion, respectively. Shares of FTNT have increased 36.6% in the past year.

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