Communication services earnings week: three of four companies beat EPS forecasts

what happened

According to Seeking Alpha, four communication services companies reported this week, and three of them beat earnings-per-share estimates. On revenue, two companies topped expectations while two came in below analyst forecasts. Year to date, the sector has dropped more than 14%, while the S&P 500 has gained nearly 13%.

Alphabet shares sank more than 12% on Thursday. It was the first quarterly earnings miss since the fourth quarter of 2022, with third-quarter profit trailing Wall Street estimates even though Google Cloud revenue more than doubled on strong demand for artificial intelligence infrastructure and services. Verizon posted third-quarter revenue and adjusted earnings above estimates and raised its full-year 2026 guidance for a third straight quarter, helped by subscriber growth and higher margins. T-Mobile reported revenue up 7.4% and earnings up 34%, both ahead of expectations.

why it matters

Alphabet's miss despite fast cloud growth shows that investors judge large tech names on profit as well as sales. Telecoms looked steadier this quarter, which stands out against a sector trailing the broader market. Next week, Charter Communications, Live Nation, Fox and News Corp are scheduled to report.

market impact

Alphabet and telecoms: mixed results, with the communication services sector lagging the S&P 500

tags

instruments