Why Cogent (CCOI) Shares Are Falling Today

Looking back on telecommunication services stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Iridium and its peers.

The sector is a tale of two cities. Satellite telecommunication is generally buoyed by rising global demand for connectivity in costly-to-connect and remote areas. On the other hand, terrestrial telecommunication companies face an uphill battle, as they mostly sell into a deflationary market, where the price of moving a bit tends to decrease over time with better technology. Despite the differences in demand drivers, companies across the entire industry must contend competition from larger telecom conglomerates and hyperscalers expanding their own networks as well as newer entrants such as SpaceX's StarLink.

The 5 telecommunication services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.7%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 17.2% since the latest earnings results.

Best Q3: Iridium

With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications operates a global satellite network that provides voice and data services to customers in remote areas where traditional telecommunications are unavailable.

Iridium reported revenues of $226.9 million, up 6.7% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and a decent beat of analysts’ revenue estimates.

"We continue to execute with discipline, focusing efforts on growth markets where our unique network delivers a competitive advantage, specifically in government, regulated industries, and critical infrastructure," said Matt Desch, CEO of Iridium.

Unsurprisingly, the stock is down 18.1% since reporting and currently trades at $16.11.

Is now the time to buy Iridium? Access our full analysis of the earnings results here, it’s free for active Edge members.

Lumen

With approximately 350,000 route miles of fiber optic cable spanning North America and the Asia Pacific, Lumen Technologies operates a vast fiber optic network that provides communications, cloud connectivity, security, and IT solutions to businesses and consumers.

Lumen reported revenues of $3.09 billion, down 4.2% year on year, outperforming analysts’ expectations by 0.9%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 26.9% since reporting. It currently trades at $7.65.

Is now the time to buy Lumen? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Array

Operating as a majority-owned subsidiary of Telephone and Data Systems since its founding in 1983, Array (NYSE:Array) is a regional wireless telecommunications provider serving 4.6 million customers across 21 states with mobile phone, internet, and IoT services.

Array reported revenues of $47.12 million, up 83.1% year on year, exceeding analysts’ expectations by 15.7%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 3.7% since the results and currently trades at $45.91.

Read our full analysis of Array’s results here.

Cogent

Operating a massive network spanning 20,000 miles of fiber optic cable and connecting to over 3,200 buildings worldwide, Cogent Communications provides high-speed Internet access, private network services, and data center colocation to businesses and bandwidth-intensive organizations across 54 countries.

Cogent reported revenues of $241.9 million, down 5.9% year on year. This result came in 1.7% below analysts' expectations. Taking a step back, it was still a strong quarter as it logged a beat of analysts’ EPS estimates.

Cogent had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 55.2% since reporting and currently trades at $17.16.

Read our full, actionable report on Cogent here, it’s free for active Edge members.

Globalstar

Known for powering the emergency SOS feature in newer Apple iPhones, Globalstar operates a network of low-earth orbit satellites that provide voice and data communications services in remote areas where traditional cellular networks don't reach.

Globalstar reported revenues of $73.85 million, up 2.1% year on year. This print beat analysts’ expectations by 7.1%. It was a very strong quarter as it also produced an impressive beat of analysts’ revenue estimates and full-year revenue guidance beating analysts’ expectations.

The stock is up 17.9% since reporting and currently trades at $56.89.

Read our full, actionable report on Globalstar here, it’s free for active Edge members.

Check out the companies making headlines this week:

Cogent : Internet service provider Cogent Communications rose by 6.8% on Tuesday after its board of directors authorized management to resume the company's stock repurchase program. See our full article here.

Is now the time to buy Cogent? Access our full analysis report here.

Western Digital : Leading data storage manufacturer Western Digital rose by 2.1% on Monday after the company announced a series of next-generation storage solutions aimed at the rapidly growing artificial intelligence (AI) and high-performance computing (HPC) markets. See our full article here.

Is now the time to buy Western Digital? Access our full analysis report here.

Wix : Website building platform Wix fell by 17.2% on Wednesday after the company reported third-quarter results where a beat on revenue was overshadowed by a significant miss on operating income and deteriorating margins. See our full article here.

Is now the time to buy Wix? Access our full analysis report here.

Jack in the Box : Fast-food chain Jack in the Box fell by 2.7% on Monday after UBS lowered its price target on the stock to $17 from $20, citing concerns about sales pressure ahead of the company's fourth-quarter earnings report. See our full article here.

Is now the time to buy Jack in the Box? Access our full analysis report here.

BrightView : Landscaping service company BrightView fell by 2.4% on Thursday after the company reported disappointing third-quarter earnings results, missing Wall Street's expectations for both revenue and profit and providing a weak forecast for the upcoming year. See our full article here.

Is now the time to buy BrightView? Access our full analysis report here.