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Will Liberty Global (LBTYA) Disappoint Again in Q2 Earnings?
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Liberty Global plc. (LBTYA - Free Report) , a leading cable TV operator in Europe and Latin America, is scheduled to report second-quarter 2016 results on Aug 4, after market close.
In the fourth quarter of 2015, the company posted a massive negative earnings surprise of 1166.67%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 708.89%. Let’s see how things are shaping up for this announcement.
Liberty Global has been underperforming for quite some time now, with both the share price and earnings estimates on a downtrend. Moreover, the company’s operations in Europe, which has been subjected to considerable volatility post Brexit, are a major concern. The ongoing debt-crisis and low per-capita income may impede customer spending on pricey high-speed communication services. This may dent the top line and EBDITA margins for Liberty Global.
Liberty Global’s video, broadband, fixed-line telephony and mobile services are also facing intense competition as the market for such businesses is rapidly evolving, increasing the number of alternate providers available to customers. Costs associated with change in programming rates, inclusive of retransmission and copyright fees charged by broadcasters, may further hurt margins. Recently, Liberty Global and Vodafone Group Plc. (VOD - Free Report) jointly offered concessions through the divestment of infrastructure assets to rivals to ensure regulatory clearance for their proposed joint venture (JV) in the Netherlands.
Nevertheless, Liberty Global is expected to benefit from its widespread adoption of broadband and data services in the form of its new launch of DOCSIS 3.1 network services, acquisition of UTV Ireland TV stations from ITV and takeover of Cable & Wireless Communications Plc. However, Liberty Global’s interest in acquiring Telefonica SA’s (TEF - Free Report) O2 is contingent on the collapse of O2’s merger deal with U.K. wireless giant Hutchison Whampoa.
Earnings Whispers
Our proven model does not conclusively show that Liberty Global is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Liberty Global has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 5 cents.
Zacks Rank: Liberty Global has a Zacks Rank #4 (Sell). Please note thatwe caution against stocks with a Zacks Rank #4 or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stock to Consider
Here is a company to consider instead as our model shows that it has the right combination of elements to post an earnings beat this quarter.
CDK Global, Inc. , with an earnings ESP of +2.08% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Will Liberty Global (LBTYA) Disappoint Again in Q2 Earnings?
Liberty Global plc. (LBTYA - Free Report) , a leading cable TV operator in Europe and Latin America, is scheduled to report second-quarter 2016 results on Aug 4, after market close.
In the fourth quarter of 2015, the company posted a massive negative earnings surprise of 1166.67%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 708.89%. Let’s see how things are shaping up for this announcement.
LIBERTY GLBL-A Price and EPS Surprise
LIBERTY GLBL-A Price and EPS Surprise | LIBERTY GLBL-A Quote
Factors Likely to Influence this Quarter
Liberty Global has been underperforming for quite some time now, with both the share price and earnings estimates on a downtrend. Moreover, the company’s operations in Europe, which has been subjected to considerable volatility post Brexit, are a major concern. The ongoing debt-crisis and low per-capita income may impede customer spending on pricey high-speed communication services. This may dent the top line and EBDITA margins for Liberty Global.
Liberty Global’s video, broadband, fixed-line telephony and mobile services are also facing intense competition as the market for such businesses is rapidly evolving, increasing the number of alternate providers available to customers. Costs associated with change in programming rates, inclusive of retransmission and copyright fees charged by broadcasters, may further hurt margins. Recently, Liberty Global and Vodafone Group Plc. (VOD - Free Report) jointly offered concessions through the divestment of infrastructure assets to rivals to ensure regulatory clearance for their proposed joint venture (JV) in the Netherlands.
Nevertheless, Liberty Global is expected to benefit from its widespread adoption of broadband and data services in the form of its new launch of DOCSIS 3.1 network services, acquisition of UTV Ireland TV stations from ITV and takeover of Cable & Wireless Communications Plc. However, Liberty Global’s interest in acquiring Telefonica SA’s (TEF - Free Report) O2 is contingent on the collapse of O2’s merger deal with U.K. wireless giant Hutchison Whampoa.
Earnings Whispers
Our proven model does not conclusively show that Liberty Global is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Liberty Global has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 5 cents.
Zacks Rank: Liberty Global has a Zacks Rank #4 (Sell). Please note thatwe caution against stocks with a Zacks Rank #4 or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stock to Consider
Here is a company to consider instead as our model shows that it has the right combination of elements to post an earnings beat this quarter.
CDK Global, Inc. , with an earnings ESP of +2.08% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>