The Zacks Diversified Communication Services industry appears mired in shrinking profit margins due to high capital expenditures for 5G infrastructure upgrades, unpredictable raw material prices, supply-chain disruptions amid geopolitical tensions, latent tariff-war threats, intense market volatility and high customer inventory levels. However, the industry is likely to benefit in the long run from an accelerated 5G rollout and increased fiber densification.  Amid such uncertain market conditions, Telefónic ...

Core Insights - TELUS Corporation reported third-quarter 2025 adjusted earnings per share (EPS) of C$0.24, a decrease from C$0.28 a year ago, with total operating revenues remaining almost flat at C$5,106 million [1][8] - The company experienced total mobile and fixed customer growth of 288,000 during the quarter, with significant contributions from mobile phone and Internet customer additions [2] Financial Performance - TELUS' operating revenues from contracts with customers were C$5,067 million, slightly up from C$5,042 million in the same period last year [1] - TTech revenues decreased 3% year over year to C$3,877 million, with mobile network revenues declining 1% to C$1,755 million due to lower mobile phone ARPU [5][9] - Fixed data service revenues increased 1% to C$1,185 million, driven by an expanding subscriber base, while fixed voice services revenues fell 7% to C$167 million [9][10] - Health services revenues surged 18% year over year to C$516 million, supported by acquisitions and strong digital health solutions [13] Strategic Developments - TELUS finalized a partnership with La Caisse to form Terrion, enhancing national wireless connectivity and accelerating deleveraging efforts [3] - The company acquired full ownership of TELUS Digital, aiming to drive AI-powered transformation and achieve approximately C$150 million in annual cash synergies [4] Cash Flow and Guidance - TELUS generated C$1,493 million of cash from operating activities, with free cash flow increasing 8% to C$611 million [18] - For 2025, TTech operating revenue is expected to be at the lower end of the 2%-4% target range, with adjusted EBITDA growth projected at 3-5% [20][21]

Core Insights - Telus reported quarterly earnings of $0.17 per share, missing the Zacks Consensus Estimate of $0.19 per share, and down from $0.21 per share a year ago, representing an earnings surprise of -10.53% [1] - The company posted revenues of $3.71 billion for the quarter ended September 2025, which was 0.27% below the Zacks Consensus Estimate and a decrease from $3.74 billion year-over-year [2] - Telus has surpassed consensus EPS estimates two times over the last four quarters and has topped consensus revenue estimates only once during the same period [2] Earnings Outlook - The sustainability of Telus's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $3.9 billion, and for the current fiscal year, it is $0.72 on revenues of $14.97 billion [7] Industry Context - The Zacks Industry Rank for Diversified Communication Services, which includes Telus, is currently in the bottom 21% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Telus's stock performance [5][6]

Core Insights - BCE Inc. reported third-quarter 2025 adjusted earnings per share (EPS) of C$0.79, an increase from C$0.75 in the prior-year quarter, surpassing the Zacks Consensus Estimate of 52 cents [1][11] - The company's quarterly operating revenues rose 1.3% year over year to C$6.05 billion, driven by a 0.8% increase in service revenue and a 5.1% rise in product revenue [2][11] Financial Performance - BCE's operating revenues were C$6.05 billion, with service revenue at C$5.33 billion and product revenue at C$720 million, aided by the acquisition of Ziply Fiber [2][3] - Free cash flow surged 20.6% to C$1 billion, attributed to lower capital expenditures and costs [11][18] - Adjusted EBITDA rose 1.5% year over year to C$2.76 billion, with a steady adjusted EBITDA margin of 45.7% [15] Segment Analysis - The newly structured Bell CTS segment generated C$5.41 billion in revenue, up 2.4% year over year, benefiting from both service and product revenue growth [6] - Bell CTS Canada's operating revenue declined 0.6% to C$5.2 billion, with service revenue falling 1.5% to C$4.5 billion due to declines in legacy services [7] - Bell Media's operating revenue decreased 6.4% to C$732 million, impacted by weak advertising and subscriber revenues [14] Customer Metrics - Postpaid mobile phone net additions totaled 11,511, down 65.2% year over year, reflecting a decline in gross activations [9] - Prepaid mobile phone net additions were 56,507, down from 69,085 in the prior-year quarter, due to a decrease in gross activations and higher churn [12] Capital Expenditures and Cash Flow - Capital expenditures decreased 6.6% to C$891 million, with capital intensity dropping to 14.7% from 16% in the prior-year quarter [17] - Cash flow from operating activities rose 3.9% to C$1.91 billion, driven by improved working capital [18] Future Guidance - For 2025, BCE anticipates revenue growth of 0-2% and adjusted EBITDA growth in the same range, while free cash flow is forecasted to grow by 6% to 11% [19]

Core Points - Shenandoah Telecommunications reported a quarterly loss of $0.2 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.22, but worse than a loss of $0.13 per share a year ago [1][2] - The company achieved an earnings surprise of +9.09% this quarter, having surpassed consensus EPS estimates three times over the last four quarters [2] - Revenues for the quarter ended September 2025 were $89.8 million, exceeding the Zacks Consensus Estimate by 0.44% and up from $87.6 million year-over-year [3] Financial Performance - The stock has added approximately 2.5% since the beginning of the year, while the S&P 500 has gained 17.2% [4] - Current consensus EPS estimate for the upcoming quarter is -$0.17 on revenues of $90.7 million, and for the current fiscal year, it is -$0.79 on revenues of $356.56 million [8] Industry Outlook - The Diversified Communication Services industry, to which Shenandoah Telecom belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [9] - The estimate revisions trend for Shenandoah Telecom was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [7]

Koninklijke KPN NV (KKPNF) came out with quarterly earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.08 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -12.50%. A quarter ago, it was expected that this company would post earnings of $0.07 per share when it actually produced earnings of $0.06, delivering a surprise of -14.29%.Over the last four quarters, the co ...

Core Insights - Lumen Technologies, Inc. is set to report its Q3 2025 results on October 30, with a consensus estimate of a loss of $0.31 per share, compared to a loss of $0.13 in the same quarter last year, and total revenues expected to be $3.04 billion, reflecting a 5.5% year-over-year decline [1][10] Group 1: Financial Performance and Estimates - Lumen's earnings have exceeded the Zacks Consensus Estimate in the last four quarters, with an average surprise of 97.5% [2] - The company anticipates adjusted EBITDA to be between $3.2 billion and $3.4 billion for 2025, expecting to report near the high end of this range [10] - Cost-cutting measures are projected to yield $350 million in run-rate benefits for 2025, an increase from the previously targeted $250 million [10] Group 2: Growth Drivers - Lumen is benefiting from the rise of AI, with $9 billion in Private Connectivity Fabric (PCF) deals, up $500 million from the previous quarter, driven by demand for existing conduit and new route construction [3] - The adoption of Network-as-a-Service (NaaS) is increasing, with Lumen surpassing 1,000 customers and partnerships with the three largest cloud service providers [4] - A connected ecosystem is being developed to facilitate the purchase and management of network services, which is expected to accelerate client acquisition [5] Group 3: Strategic Initiatives - Lumen is pursuing a $5.75 billion sale of its Mass Markets fiber-to-the-home business to AT&T, expected to close in the first half of 2026, which will help reduce debt [8] - The company is focused on simplifying its capital structure and extending debt maturities, having executed a $2 billion refinancing that saves nearly $50 million in annual interest expenses [9] - Recent collaboration with Palantir Technologies aims to enhance AI deployment for enterprises in multi-cloud environments [13] Group 4: Challenges and Market Conditions - The legacy business continues to face secular headwinds, impacting top-line growth, particularly in the Wholesale segment [11] - Lumen expects Public Sector Harvest revenues to normalize in the second half of 2025 after elevated levels [12] - The company anticipates fluctuations in free cash flow as it navigates significant PCF builds, alongside concerns over higher costs, macro volatility, and competition in the AI sector [12] Group 5: Infrastructure Development - Lumen plans to add 34 million new intercity fiber miles by 2028, with over 2.2 million new miles deployed in 2025 alone [14] - Construction is ongoing at 176 In-Line Amplifier sites to enhance signal strength and scalability [14]

Core Insights - Lumen's shares increased by 9.1% to close at $6.14, with a notable 42.5% gain over the past four weeks, driven by strong trading volume [1] - The rise in share price is linked to the launch of Wavelength RapidRoutes, which offers a 20-day delivery SLA for high-capacity connections, significantly faster than traditional services [2] - Lumen's collaboration with Palantir Technologies aims to integrate AI capabilities into its operations, marking a shift towards a next-gen tech infrastructure [3] Financial Performance - Lumen is expected to report a quarterly loss of $0.20 per share, reflecting a year-over-year decline of 53.9%, with revenues projected at $3.04 billion, down 5.5% from the previous year [5] - The consensus EPS estimate for Lumen has remained unchanged over the last 30 days, indicating potential stability in earnings expectations [6] Industry Context - Lumen is part of the Zacks Diversified Communication Services industry, where Grupo Televisa has seen a 21.7% return over the past month but is currently rated as a sell [6][7] - The demand for Lumen's PCF solutions is increasing due to rapid AI growth, although legacy business challenges may hinder top-line growth in the near term [4]

Industry Overview - The Zacks Diversified Communication Services industry is facing challenges such as high capital expenditures for 5G infrastructure, unpredictable raw material prices, supply-chain disruptions due to geopolitical tensions, and high customer inventory levels [1] - The industry is expected to benefit from accelerated 5G rollout and increased fiber densification in the long run [1] Current Market Conditions - Companies like Telenor ASA, Telecom Italia S.p.A., and VEON Ltd. are likely to benefit from increased demand for scalable infrastructure due to the proliferation of IoT and the transition to cloud networks [2] - Demand for traditional telephony services is declining as customers switch to lower-priced alternatives and migrate to IP-based services, exacerbated by ongoing geopolitical tensions [4] Strategic Focus - Companies are focusing on providing customized support services to small and mid-sized businesses (SMBs) to improve profitability and adapt to technology advancements [5] - The industry is also offering free services to low-income families and enhancing wireless connectivity to address operating risks [5] Supply Chain and Cost Challenges - The industry continues to face a shortage of chips and high raw material prices due to inflation and economic sanctions, impacting production costs and schedules [6] - Extended lead times for basic components are likely to further escalate production costs and affect profitability [6] Profitability Outlook - The growth of video and bandwidth-intensive applications has led to significant investments in LTE, broadband, and fiber, although these investments have compromised short-term profitability [7] - The industry is transforming from traditional telecommunications firms to technology-driven companies to meet growing demand [7] Industry Performance - The Zacks Diversified Communication Services industry ranks 184, placing it in the bottom 25% of over 250 Zacks industries, indicating bearish near-term prospects [8][9] - The industry has underperformed compared to the S&P 500 and the broader Zacks Utilities sector, with a meager growth of 0.7% over the past year compared to 21.1% and 6.3% respectively [10] Valuation Metrics - The industry is currently trading at a trailing 12-month EV/EBITDA of 11.93X, below the S&P 500's 17.79X and the sector's 14.98X [13] Company Highlights - **Telenor ASA**: Recently completed a $15 billion merger with Axiata Group, with a current-year earnings estimate revised upward by 14.1% to $0.89 per share, and a stock gain of 34.2% in the past year [16] - **Telecom Italia**: Achieved a 101% stock gain in the past year, with current-year earnings estimate revised upward by 188.9% to $0.08 per share [17] - **VEON Ltd.**: Stock gained 112.6% in the past year, with current-year earnings estimate revised upward by 112% since June 2025 [21]

Core Insights - TELUS Corporation has reached a definitive agreement to acquire all outstanding shares of TELUS International, valuing each share at $4.50, totaling approximately $539 million [1][9] - The acquisition is expected to enhance TELUS's digital customer experience, accelerate AI capabilities, and drive SaaS transformation across its core businesses [3][9] - The deal has been unanimously approved by TELUS Digital's board and is supported by EQT, the largest minority shareholder [4][5] Financial Details - Shareholders will have three payment options: $4.50 in cash, 0.273 of a TELUS common share, or a combination of $2.25 in cash and 0.136 of a TELUS share, with no more than 25% of the total consideration paid in shares [2] - The agreed price represents a 52% premium over TELUS Digital's closing share price of $2.96 on June 11, 2025 [2] - The transaction values TELUS Digital at $2.9 billion and is subject to shareholder, court, and regulatory approvals [5] Strategic Implications - The acquisition aligns with TELUS's broader strategy to strengthen its position in digital transformation, AI, and global innovation across multiple industries [3][5] - TELUS Digital's operating revenues increased by 8% in Q2 2025, aided by a stronger U.S. dollar and euro, while adjusted EBITDA decreased by 25.8% year-over-year [6] - The integration aims to enhance TELUS's capabilities in fintech, gaming, media, and healthcare, ensuring substantial value creation for shareholders [3][5] Approval Process - A special shareholder meeting is scheduled for October 27, 2025, with TELUS Digital shareholders of record on September 12 eligible to vote [5] - If approved, the transaction is expected to close in Q4 2025, after which TELUS Digital's shares will be delisted [5][9]