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News Corp. (NWSA) Q2 Earnings: Will the Stock Disappoint?
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News Corporation (NWSA - Free Report) , the diversified media conglomerate, is slated to report the second quarter of fiscal 2017 results on Feb 9. The question lingering in investors’ minds is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, News Corporation underperformed the Zacks Consensus Estimate by an average of 10.4%.
This is evident from the stock’s performance in the past six months. Shares of News Corporation have declined 4.8% in the said time frame, underperforming the Zacks categorized Movie/TV Production/Distribution industry, which gained 15.8%. In fact, it also underperformed the broader Consumer Discretionary sector that increased 8.5%.
Which Way are Estimates Treading?
Let’s look at earnings estimate revisions in order to get a clear picture of what analysts are thinking about the company right before earnings release. The current Zacks Consensus Estimate for the quarter under review has been stable in the past 30 days, and is currently pegged at 18 cents, down couple of cents from the year-ago quarter. Analysts polled by Zacks expect revenues of $2,137 million, down roughly 1% from the prior-year period.
What the Zacks Model Unveils?
Our proven model does not conclusively show that News Corporation is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
News Corporation has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 18 cents. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
News Corporation Price, Consensus and EPS Surprise
News Corporation is in a transitionary phase, looking to diversify its revenue streams through strategic acquisitions and operational enhancement. The company is expanding its digital offerings, along with greater emphasis on real estate businesses. However, foreign currency headwinds and soft print advertising demand continue to weigh upon the company’s performance to an extent.
Advertising, which forms a major part of News Corporation’s total revenue (approximately 44% of fiscal 2016 total revenue), remains highly vulnerable to the economic conditions. Advertising revenue fell 11% during the first quarter of fiscal 2017 at the News and Information Services segment. Adverse foreign currency fluctuations hurt first-quarter fiscal 2017 total revenue by $36 million.
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:
Marriott International, Inc. (MAR - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank #2.
Viacom, Inc. has an Earnings ESP of +2.41% and currently has a Zacks Rank #3.
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News Corp. (NWSA) Q2 Earnings: Will the Stock Disappoint?
News Corporation (NWSA - Free Report) , the diversified media conglomerate, is slated to report the second quarter of fiscal 2017 results on Feb 9. The question lingering in investors’ minds is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, News Corporation underperformed the Zacks Consensus Estimate by an average of 10.4%.
This is evident from the stock’s performance in the past six months. Shares of News Corporation have declined 4.8% in the said time frame, underperforming the Zacks categorized Movie/TV Production/Distribution industry, which gained 15.8%. In fact, it also underperformed the broader Consumer Discretionary sector that increased 8.5%.
Which Way are Estimates Treading?
Let’s look at earnings estimate revisions in order to get a clear picture of what analysts are thinking about the company right before earnings release. The current Zacks Consensus Estimate for the quarter under review has been stable in the past 30 days, and is currently pegged at 18 cents, down couple of cents from the year-ago quarter. Analysts polled by Zacks expect revenues of $2,137 million, down roughly 1% from the prior-year period.
What the Zacks Model Unveils?
Our proven model does not conclusively show that News Corporation is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
News Corporation has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 18 cents. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
News Corporation Price, Consensus and EPS Surprise
News Corporation Price, Consensus and EPS Surprise | News Corporation Quote
Factors Influencing this Quarter
News Corporation is in a transitionary phase, looking to diversify its revenue streams through strategic acquisitions and operational enhancement. The company is expanding its digital offerings, along with greater emphasis on real estate businesses. However, foreign currency headwinds and soft print advertising demand continue to weigh upon the company’s performance to an extent.
Advertising, which forms a major part of News Corporation’s total revenue (approximately 44% of fiscal 2016 total revenue), remains highly vulnerable to the economic conditions. Advertising revenue fell 11% during the first quarter of fiscal 2017 at the News and Information Services segment. Adverse foreign currency fluctuations hurt first-quarter fiscal 2017 total revenue by $36 million.
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:
Time Warner Inc. has an Earnings ESP of +1.68% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marriott International, Inc. (MAR - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank #2.
Viacom, Inc. has an Earnings ESP of +2.41% and currently has a Zacks Rank #3.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>