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Meredith (MDP) Q2 Earnings: Will the Earnings Streak Stay?

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Meredith Corporation , one of leading media and marketing companies in the U.S. is slated to release its second-quarter fiscal 2017 results on Jan 25. The company has outpaced the Zacks Consensus Estimate for 12 straight quarters when it reported the fiscal first quarter. In the trailing four quarters, it has posted an average earnings beat of 6.7%. Let’s see how things are shaping up for this announcement.

Earnings Whispers

Our proven model does not conclusively show that Meredith is likely to beat earnings estimates 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. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP for Meredith is currently 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both are pegged at $1.21. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Meredith currently has a Zacks Rank #3. While the company’s current Zacks Rank increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Factors Influencing this Quarter

Meredith’s strategic investments, along with acquisitions and partnership deals, play a major role in fortifying its media portfolio. Further, the company is focused on bolstering advertising revenues, primarily in the digital space and is increasingly concentrating on brand licensing, marketing services and eCommerce. In addition, the company is aggressively expanding its brands through online platforms, televisions, videos, mobile applications as well as broadening its range of food and lifestyle content.

Throwing light on its performance, the company’s first-quarter results were driven by robust political advertising revenues and growth in digital advertising revenues. Going forward, management expects strong political advertising cycle as well as higher retransmission revenues and robust digital advertising revenue growth to drive its performance higher in fiscal 2017. Further, second-quarter earnings are anticipated to be in the range of $1.18–$1.23 per share. Estimates have been largely stable ahead of the earnings release.

We noted that the stock yielded a return of 48.7% over the past one year, clearly outperforming the Zacks categorized Publishing-Periodicals industry’s gain of 42.8%.



However, declining print media trends, volatile raw material prices and stiff competition continue to be the major concerns for the company. Also, shift to online is likely to put enormous pressure on Meredith’s magazine portfolio.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Michael Kors Holdings Limited has an Earnings ESP of +2.45% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tractor Supply Company (TSCO - Free Report) has an Earnings ESP of +1.09% and a Zacks Rank #2.

Yum! Brands, Inc. (YUM - Free Report) has an Earnings ESP of +2.82% and a Zacks Rank #3.

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