What to Expect Ahead of Millicom International's Q4 Earnings Release?

Millicom International Cellular S.A. TIGO is set to report fourth-quarter 2025 results on Feb. 26. 

The Zacks Consensus Estimate for revenues is pinned at $1.56 billion, up 9% from the prior-year reported number. 

The consensus estimate for earnings is pinned at $1.05 per share, up 425% year over year. The estimate has remained unchanged in the past 60 days.

TIGO’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters, while beating once, delivering an average negative surprise of 23.21%. 

In the past year, shares of the company have gained 146.1% compared with the Zacks Wireless-Non-US industry’s growth of 60.1%.

Factors at Play Ahead of TIGO’s Q4 Results

Headquartered in Luxembourg, Millicom is a leading provider of fixed and mobile telecommunication services in Latin America.

TIGO is likely to have gained from commercial execution across the consumer segment and in the business segments.

Mobile business has been gaining from ARPU expansion in the prepaid category. In the last reported quarter, mobile service revenues were up 5.5% year over year, on an organic basis, driven by higher ARPU from pricing alignment with inflation and migration from prepaid to postpaid. Fixed-mobile convergence strategies and disciplined channel execution bode well.

B2B momentum, especially digital services, is expected to have aided revenue performance in the fourth quarter. In the last reported quarter, digital services, including cloud, cybersecurity and SD-WAN, expanded approximately 35% year over year, contributing to overall digital revenue growth of 10%. 

Across geographies, TIGO has been witnessing continued strength in the markets of Colombia and Guatemala. 

Millicom International Cellular SA Price and EPS Surprise

Millicom International Cellular SA price-eps-surprise | Millicom International Cellular SA Quote

Synergies from acquisitions are another key growth driver. It recently purchased 67.5% controlling stake from Telefonica in Colombia Telecomunicaciones S.A. E.S.P. It also acquired  Telefonica's operations in Chile in a joint venture with NJJ. 

Before that, it acquired Telefonica’s Uruguay and Ecuador businesses. The acquisitions of Uruguay and Ecuador expand Millicom’s footprint to 11 countries. Uruguay adds approximately $246 million in annual revenues and $93 million in adjusted EBITDA, while Ecuador contributes roughly $490 million in revenues and $161 million in EBITDA. These markets strengthen footprint in Latin America, with Ecuador’s dollarized economy offering stability.

In Colombia, progress on the EPM privatization process and the Coltel acquisition remains on track, with both transactions expected to close in the first quarter of 2026.

Cost discipline is likely to have cushioned margin performance. TIGO projects leverage target of below 2.5x for 2025. 

Management also reaffirmed its 2025 equity-free cash flow target of approximately $750 million, despite currency headwinds in Bolivia. Softness in Costa Rica, along with legal provisions and higher capex, is an added concern. Millicom recorded a $118 million provision in the third quarter related to the ongoing DOJ investigation.

While management expects positive growth in the home service segment in the fourth quarter, competitive pressure can prove an overhang.

What Does Our Model Unveil for TIGO?

Our proven model does not predict an earnings beat for TIGO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

At present, TIGO has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three stocks you may want to consider, as our model shows that these have the right elements to post an earnings beat in this reporting cycle.

Credo Technology Group Holding Ltd CRDO currently has an Earnings ESP of +3.54% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CRDO is scheduled to report quarterly earnings on March 2. The Zacks Consensus Estimate for Credo’s to-be-reported quarter’s earnings and revenues is pegged at 96 cents per share and $389.4 million, respectively. Shares of CRDO have gained 97.1% in the past year.

MongoDB MDB has an Earnings ESP of +0.05% and a Zacks Rank #1 at present. MDB is scheduled to report quarterly figures on March 2. The Zacks Consensus Estimate for MDB’s to-be-reported quarter’s earnings and revenues is pegged at $1.47 per share and $668.2 million, respectively. Shares of MDB have gained 16.4% in the past year.

Dave Inc DAVE has an Earnings ESP of +9.07% and a Zacks Rank #1 at present. It is scheduled to report quarterly figures on March 2. The Zacks Consensus Estimate for DAVE’s to-be-reported quarter’s earnings and revenues is pegged at $3.50 per share and $164 million, respectively. Shares of DAVE have gained 63.5% in the past year. 

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This article originally published on Zacks Investment Research (zacks.com).

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