The Zacks Diversified Communication Services industry appears well-positioned to capitalize on the healthy demand trends driven by the fast-track 5G deployment and the transition to cloud and fiber network infrastructure. However, high capital expenditures for infrastructure upgrades, volatility in raw material prices, geopolitical conflicts and elevated inventory levels amid uncertain market conditions have dented the industry’s profitability.  Telefonica Brasil S.A. (VIV) , Lumen Technologies, Inc. (LUMN) ...

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Core Insights - The article compares Telefonica Brasil (VIV) and Chunghwa (CHT) to determine which stock offers better value for investors [1] Group 1: Zacks Rank and Analyst Outlook - Telefonica Brasil has a Zacks Rank of 1 (Strong Buy), indicating a more favorable earnings estimate revision trend compared to Chunghwa, which has a Zacks Rank of 3 (Hold) [3] - The improving analyst outlook for VIV suggests a more positive sentiment among analysts [3] Group 2: Valuation Metrics - VIV has a forward P/E ratio of 19.00, while CHT has a higher forward P/E of 25.43, indicating that VIV may be undervalued relative to CHT [5] - The PEG ratio for VIV is 0.88, significantly lower than CHT's PEG ratio of 5.40, suggesting better growth prospects relative to its valuation for VIV [5] - VIV's P/B ratio is 2.03, compared to CHT's P/B of 2.54, further supporting the argument that VIV is a more attractive investment [6] Group 3: Value Grades - VIV has earned a Value grade of B, while CHT has a Value grade of D, indicating that VIV is perceived as a better value stock [6] - The combination of Zacks Rank and Style Scores suggests that VIV stands out as the preferable option for value investors at this time [6]

Core Insights - BCE Inc. reported a decline in fourth-quarter 2025 adjusted earnings per share (EPS) to C$0.69 from C$0.79 in the prior-year quarter, exceeding the Zacks Consensus Estimate of 45 cents [2] - Total operating revenues for the quarter decreased by 0.3% year over year to C$6.4 billion, below the consensus estimate of $4.7 billion, primarily due to a 15% drop in Product revenues [3] Financial Performance - For 2025, BCE's operating revenue increased slightly by 0.2% to C$24.5 billion, with a quarterly dividend declared at C$0.4375 per share [4] - The company anticipates higher revenue and adjusted EBITDA for 2026, driven by contributions from Ziply Fiber and growth in AI-powered enterprise solutions, despite a forecasted decline in adjusted EPS [5] Segment Results - The Bell CTS segment generated C$5.7 billion in revenue, a 0.2% year-over-year increase, supported by higher service revenue [7] - Bell CTS Canada experienced a 3.9% decline in operating revenue to C$5.5 billion, impacted by lower product and service sales [8] Subscriber Metrics - Postpaid net additions slightly decreased to 56,124, with improved churn rates at 1.49%, while prepaid subscriber losses narrowed [11] - The acquisition of Ziply Fiber contributed to the new Bell CTS U.S. segment, generating C$232 million in operating revenues since its inception [12] Media Performance - Bell Media's operating revenue fell by 3.4% to C$804 million, affected by weak advertising demand, although subscriber revenue increased by 1.5% [13] - Total digital revenue rose by 3%, supported by growth in Crave and sports direct-to-consumer subscribers [14] Operational Efficiency - BCE's adjusted EBITDA increased by 2.3% year over year to C$2.66 billion, with an expanded adjusted EBITDA margin of 41.6%, the highest in over 30 years [15] - Capital expenditures surged by 36.8% to C$1.3 billion, primarily due to investments in Ziply Fiber's FTTP expansion [16] Cash Flow Analysis - Operating cash flow decreased by 16.8% to C$1.6 billion, while free cash flow plummeted by 74.3% to C$225 million due to higher capital expenditures [17] 2026 Outlook - Management projects revenue growth of 1-5% and adjusted EBITDA growth of 0-4% for 2026, with adjusted EPS expected to decline between 11% and 5% [18]

分组1 - Koninklijke KPN NV reported quarterly earnings of $0.07 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.05 per share a year ago [1] - The company's revenues for the quarter were $1.73 billion, which missed the Zacks Consensus Estimate by 1.27%, compared to $1.54 billion in the same quarter last year [2] - Over the last four quarters, Koninklijke KPN has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2][6] 分组2 - The stock has gained approximately 6.2% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $1.7 billion, and for the current fiscal year, it is $0.28 on revenues of $6.92 billion [7] - The Zacks Industry Rank for Diversified Communication Services is in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Core Insights - Rogers Communication has consistently beaten earnings estimates, particularly in the last two quarters, with an average surprise of 5.05% [1] Earnings Performance - In the most recent quarter, Rogers Communication reported earnings of $0.99 per share, exceeding the expected $0.92 per share, resulting in a surprise of 7.61% [2] - For the previous quarter, the company reported $0.82 per share against an expectation of $0.80 per share, leading to a surprise of 2.50% [2] Earnings Estimates - Recent estimates for Rogers Communication have been trending upward, with a positive Earnings ESP of +5.98%, indicating bullish sentiment among analysts regarding the company's earnings prospects [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that such combinations lead to positive surprises nearly 70% of the time [6][8] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may be more accurate than earlier predictions [7] - A negative Earnings ESP can reduce predictive power but does not necessarily indicate an earnings miss [9] Importance of Earnings ESP - Companies that beat consensus EPS estimates may not always see their stock prices rise, while some may maintain their value even with a miss, highlighting the importance of checking the Earnings ESP before quarterly releases [10]

Industry Overview - The Zacks Diversified Communication Services industry is facing shrinking profit margins due to high capital expenditures for 5G infrastructure, unpredictable raw material prices, supply-chain disruptions, and intense market volatility [1][4] - The industry comprises firms providing a wide array of communication services, including wireless, wireline, and Internet services to both businesses and consumers [3] Current Challenges - The industry is experiencing high raw material prices and a shortage of chips, which are essential for telecom equipment, affecting operational schedules and profitability [4] - Short-term profitability is compromised as companies invest heavily in upgrading networks to meet the growing demand for data and video services [5] - Demand erosion is evident as customers switch to lower-priced alternatives, leading to a decline in traditional telephony services and overall network access revenues [6] Future Prospects - Despite current challenges, the industry is expected to benefit from an accelerated rollout of 5G technology and increased fiber densification in the long run [1] - Companies are focusing on providing customized services to small and mid-sized businesses (SMBs) to improve profitability and adapt to technological advancements [7] Market Performance - The Zacks Diversified Communication Services industry has underperformed compared to the S&P 500 and the broader Zacks Utilities sector over the past year, with a growth of only 5.8% compared to 16.1% and 16.8% respectively [10] - The industry currently trades at a trailing 12-month EV/EBITDA of 13.37X, below the S&P 500's 18.65X and the sector's 15.91X [13] Notable Companies - **Telefónica, S.A. (TEF)**: The company has launched 5G+ in multiple countries and has seen significant upward revisions in earnings estimates, with a Zacks Rank of 2 (Buy) [16] - **Rogers Communications Inc. (RCI)**: The company has introduced a new satellite-to-mobile service, expanding its connectivity footprint, and has a Zacks Rank of 3 (Hold) [19][20] - **Lumen Technologies, Inc. (LUMN)**: Focused on cloudifying telecom services, Lumen has seen a significant upward revision in earnings estimates and has a Zacks Rank of 2 (Buy) [23]

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]