Lumen (LUMN) Q3 earnings report preview: what to look for

What happened

Lumen Technologies will report third-quarter earnings on Wednesday after market hours. Last quarter, revenue was $2.81 billion, down 9.3% year on year, and the company beat analysts' earnings-per-share estimates. This quarter, the market expects revenue to fall 11.7% year on year.

Confirmed

Global impact / market context

Lumen has missed Wall Street's revenue estimates multiple times in the past two years, and its revenue decline is expected to get steeper. If sales keep shrinking, the company has less cash coming in to cover costs and fund network spending, which matters for investors holding the stock.

Analyst inference

Among telecom services peers, only Iridium has reported so far, beating revenue estimates with 8.3% sales growth, and its stock was unchanged after results. Peer share prices are up 1.7% on average over the last month, while Lumen is down 14% in that period.

Analyst inference

What to watch

1. Watch whether Lumen's reported revenue meets, beats, or misses the expected 11.7% year-on-year decline, since the company has missed revenue estimates multiple times over the last two years. Confirmed
2. Analysts have reconfirmed their estimates over the last 30 days, which suggests they expect the business to stay the course; treat any change in those estimates after earnings as a signal. Proposed
3. Compare Lumen's results with Iridium, the only reported peer so far, which grew sales 8.3%; weaker Lumen numbers would contrast with a peer that is still growing revenue. Analyst inference

Evidence

• stockstory.org