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Internet provider Lumen Technologies (NYSE:LUMN) is set to report its second-quarter results on Tuesday. Investors will be looking out for further details on report of lead covered cables in its network, and the impact of high interest rates.
Wall Street analysts expects Lumen to post earnings per share of $0.08 on $3.66B in revenues, which would mark a fall of 21% year-over-year.
Lumen has seen multiple changes to its estimates in the past three months: Earnings per share forecasts have been revised downwards 3 times, compared to 2 upward revisions, while revenue estimates have been revised down 3 times, in contrast to 5 upward revisions.
On July 9, the Wall Street Journal reported that AT&T (T), Verizon (VZ), and other telecom giants left behind a sprawling underground network of toxic lead cables across the United States. In a note, J.P. Morgan analyst Philip Cusick said companies such as Lumen likely have “exposure” to potential copper lead sheathing liability.
Lumen shares are down nearly 67% YTD.
Seeking Alpha analyst JR Research said, “Elevated interest rates and negative sentiment in the telco sector have worsened Lumen’s outlook, with potential liabilities from a recent lead-covered cables issue adding to concerns.”
Fellow analyst Bill Maurer said, “For the short term, this lead cable issue is now a major negative risk for Lumen shares and could potentially be an overhang on the stock for years to come.”
Seeking Alpha analysts at large rate Lumen Buy. This compares to average Wall Street rating and SA Quant rating of Hold.
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