Amid record stock market plunges and widespread fears about the health of the overall economy, the telecom industry's major players are about to report third quarter earnings. Investors will have one eye trained on vendor outlooks and the other on the carriers' consumer segment and business market revenues.
Here's a look at some key upcoming earnings reports, and important issues pertaining to each. Watch FierceTelecom closely in the weeks ahead for the latest news on third quarter earnings in the telecom sector.
Adtran, Oct. 14: Some general comments by Adtran officials in the vendor's second quarter report led some sector watchers to believe that middle-tier telcos were tightening their spending. How will the company be affected by speculation that key customer Embarq is for sale? Has a move into the gigabit passive optical network market strengthened Adtran?
Tellabs, Oct. 21: Tellabs stated, more explicitly than Adtran, in its second quarter earnings report that spending in the North American carrier market was weak. New CEO Rob Pullen has been aiming to focus the company more on international business opportunities. So, how is that plan panning out? Also Tellabs started the year as a potential acquisition target in the eyes of some, yet the current market environment would seem to discourage such prospects.
AT&T, Oct. 22: The first major U.S. telco to report third quarter earnings could confirm the sector's mood for months to come. Will U-verse have a strong quarter? Is the tough economy forcing more consumer disconnections? AT&T had indicated second-half capex would be lower than the first-half--what's the new outlook? The telco recently re-aligned its structure in a way that better integrates wireless and de-emphasizes reliance on isolated wireline endeavors, so expect further details on that move.
Verizon, Oct. 27: Verizon was the first telco to acknowledge that slowing growth in DSL wasn't just a seasonal issue. The telco has continued to aggressively roll out FiOS broadband and TV, while modifying its DSL speeds, packages and prices. The country's largest telco TV provider will be closely watched to see if TV subscriptions re-gain momentum and continue their upward trend.
Embarq, Oct. 29: Embarq, the largest independent telco, reportedly has been looking to sell, though the possibility of a deal seems less likely amid turbulent economic trends. Could the company now be looking at selling its Embarq Logistics unit? As 2008 dawned, Embarq was eying the possibility that consolidation could re-shape its end of the telecom industry, the portion most harshly affected by landline loss. Those landline numbers again will be watched closely.
Alcatel-Lucent, Oct. 30: The vendor may benefit from the possibility that expectations can't go much lower than they already are. This will be new CEO Ben Verwaayen's first earnings report, so it will be interesting to see if the company shovels out even more bad news while it still has the right to, or if it takes a completely different attitude. All eyes will be on the company's fourth quarter and remaining 2008 full-year outlook.
Windstream, Nov. 7: Like Embarq, Windstream has been seen as being at the center of potential independent telco consolidation. Again, it seems unlikely that such deals will happen soon, which leaves Windstream exposed to landline loss trends. Yet, according to some, Wndstream has done well off-setting landline decline with improving revenue elsewhere. Can it keep up the good work?