As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the telecommunication services industry, including Cogent (NASDAQ:CCOI) 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 12.2% since the latest earnings results.
Cogent (NASDAQ:CCOI)
Operating a massive network spanning 20,000 miles of fiber optic cable and connecting to over 3,200 buildings worldwide, Cogent Communications (NASDAQ:CCOI) 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 print fell short of analysts’ expectations by 1.7%, but it was still a strong quarter for the company with a beat of analysts’ EPS estimates.
Cogent delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 49.7% since reporting and currently trades at $19.25.
Is now the time to buy Cogent? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Iridium (NASDAQ:IRDM)
With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications (NASDAQ:IRDM) 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, outperforming analysts’ expectations by 1.7%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a decent 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 16.3% since reporting. It currently trades at $16.45.
Is now the time to buy Iridium? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Array (NYSE:AD)
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.
The stock is flat since the results and currently trades at $48.09.
Read our full analysis of Array’s results here.
Lumen (NYSE:LUMN)
With approximately 350,000 route miles of fiber optic cable spanning North America and the Asia Pacific, Lumen Technologies (NYSE:LUMN) 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. This result beat analysts’ expectations by 0.9%. Overall, it was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.
The stock is down 22.9% since reporting and currently trades at $8.07.
Read our full, actionable report on Lumen here, it’s free for active Edge members.
Globalstar (NASDAQ:GSAT)
Known for powering the emergency SOS feature in newer Apple iPhones, Globalstar (NASDAQ:GSAT) 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 number topped analysts’ expectations by 7.1%. It was a very strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and full-year revenue guidance beating analysts’ expectations.
The stock is up 27.4% since reporting and currently trades at $61.45.
Read our full, actionable report on Globalstar here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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