This year has been rather mediocre for the telecom industry with lukewarm results coming up amid turbulent economic conditions. The industry has emerged as an intensely contested space where success depends largely on technical superiority, quality of services and scalability. Cut-throat pricing competition has put pressure on margins this earnings season.

However, mixed results and global market concerns notwithstanding, the overall sentiment for the U.S. telecommunications industry in 2016 is positive. Telecommunications is one of the few industries to have managed to undergo rapid technological improvement even during depression. In this era of digitization and technology, the ever-growing demand for technologically superior products should see the sector through. 

Quite expectedly, investors will keep an eye on telecom earnings for the rest of this season to assess industry dynamics and future growth prospects with several big names like T-Mobile US, Inc. (TMUS – Analyst Report), Dish Network Corp. (DISH – Analyst Report) and Cincinnati Bell Inc. (CBB – Analyst Report) yet to report (read more: What Lies Ahead for Telecom ETFs in 2016?).
 
Telecom Earnings in Details
 
U.S. telecom behemoth Verizon Communications Inc. (VZ) reported impressive results beating on both the top and bottom line. Adjusted earnings per share of 89 cents beat the Zacks Consensus Estimate by a penny and year-ago earnings of 71 cents. Quarterly total revenue increased 3.2% year over year to $34,254 million, outpacing the Zacks Consensus Estimate of $34,132 million. Apart from earnings, the company was also in the news because of other developments. According to a recent Bloomberg report, Verizon has assigned its chief executive officer of its AOL unit, Tim Armstrong, a key role, exploring options to bid for the core assets of tech giant Yahoo! Inc. (YHOO). However, neither company has confirmed the news as yet. Verizon has gained 11.2% since reporting earnings (as of February 11, 2016).
 
In contrast U.S. telecom giant AT&T Inc. (T) reported weak financial results wherein both the top and bottom line lagged the Zacks Consensus Estimate. AT&T's adjusted earnings per share moved up 14.5% year over year to 63 cents, missing the Zacks Consensus Estimate by a penny. Quarterly revenue increased 22.3% year over year to $42,119 million, but missed the Zacks Consensus Estimate of $42,781 million. AT&T's weaker-than-expected earnings were primarily attributable to disappointing postpaid wireless subscriber addition of 526,000, down a significant 38.4% year over year. The stock has gained 2.3% since reporting earnings (as of February 11, 2016).
 
CenturyLink Inc.'s (CTL) solid quarterly performance was buoyed by increased revenues from the acceptance and recognition of Connect America Fund (CAF) phase II funds along with strength in high-bandwidth data services and consumer strategic revenues. The telecom company's fourth-quarter 2015 adjusted earnings per share of 80 cents surpassed the Zacks Consensus Estimate of 65 cents and were up 33.3% year over year. Quarterly total revenue of $4,476 million rose 0.9% from the prior-year quarter and surpassed the Zacks Consensus Estimate of $4,427 million. The stock climbed 11% since reporting earnings (as of February 11, 2016).
 
ETFs in Focus
 
Thanks to mixed results, telecom ETFs with considerable exposure to the three stocks above were all in the red in the last 10 trading sessions (as of February 11, 2016). Below we discuss four of these that are in focus in the coming days (see all Telecommunication ETFs here).
 
iShares US Telecommunications ETF (IYZ)