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Shaw Communications (SJR) Q4 Earnings: What's in Store?
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Shaw Communications Inc. is scheduled to release fourth-quarter fiscal 2016 results, before the opening bell on Nov 2.
Last quarter, Shaw Communications posted a positive earnings surprise of 42.31%. However, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 5.22%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
Shaw Communications’ divestiture of its subsidiary Shaw Media Inc. to Corus Entertainment Inc. places it as a pure-play Canadian telecom company with a solid growth profile. Further, the company’s venture into the Canadian wireless market is likely to prove beneficial. The company’s recent launch of mobile TV platform – FreeRange TV – and its SmartWiFi and SmartSecurity Services should gain traction as well. The company is also launching high-speed Internet services like WideOpen Internet 150 and is entering into strategic collaborations to boost its cloud suite.
However, the company operates in a highly competitive wireless market with incumbents like Rogers Communications Inc. (RCI - Free Report) , TELUS Corp. (TU - Free Report) and BCE Inc. (BCE - Free Report) . The stiff competition has resulted in losses in its video, Internet and landline phone businesses. Moreover, high debts, escalating capital expenditures, deteriorating cash position, expenses related to the rolling out of new brands and promotional costs may act as headwinds.
Earnings Whispers
Our proven model does not conclusively show that Shaw Communications 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: Shaw Communications has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 23 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Shaw Communications has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
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Shaw Communications (SJR) Q4 Earnings: What's in Store?
Shaw Communications Inc. is scheduled to release fourth-quarter fiscal 2016 results, before the opening bell on Nov 2.
Last quarter, Shaw Communications posted a positive earnings surprise of 42.31%. However, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 5.22%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
Shaw Communications’ divestiture of its subsidiary Shaw Media Inc. to Corus Entertainment Inc. places it as a pure-play Canadian telecom company with a solid growth profile. Further, the company’s venture into the Canadian wireless market is likely to prove beneficial. The company’s recent launch of mobile TV platform – FreeRange TV – and its SmartWiFi and SmartSecurity Services should gain traction as well. The company is also launching high-speed Internet services like WideOpen Internet 150 and is entering into strategic collaborations to boost its cloud suite.
However, the company operates in a highly competitive wireless market with incumbents like Rogers Communications Inc. (RCI - Free Report) , TELUS Corp. (TU - Free Report) and BCE Inc. (BCE - Free Report) . The stiff competition has resulted in losses in its video, Internet and landline phone businesses. Moreover, high debts, escalating capital expenditures, deteriorating cash position, expenses related to the rolling out of new brands and promotional costs may act as headwinds.
Earnings Whispers
Our proven model does not conclusively show that Shaw Communications 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: Shaw Communications has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 23 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Shaw Communications has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
SHAW COMMS-CL B Price and EPS Surprise
SHAW COMMS-CL B Price and EPS Surprise | SHAW COMMS-CL B Quote
Stock to Consider
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Open Text Corporation (OTEX - Free Report) , with an earnings ESP of +6.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>