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Will Rogers Communications (RCI) Disappoint in Q1 Earnings?
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Rogers Communications Inc. (RCI - Free Report) , the largest integrated telecom operator in Canada, is slated to report first-quarter 2017 results on Apr 18, after the market closes.
Last quarter, Rogers Communications’ bottom line matched the Zacks Consensus Estimate. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average negative surprise of 6.52%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Rogers Communications continues to face tough competition from market incumbents like TELUS Corp. (TU - Free Report) and BCE Inc. (BCE - Free Report) , and other small regional cable TV operators in the wireless market of Canada. Moreover, Shaw Communications Inc.’s entry into the market with the WIND Mobile acquisition has intensified competition.
Additionally, the company’s media segment remains exposed to persistent softness in the advertising market. Rogers Communications, similar to other cable companies, has lost viewers to video streaming service providers like Netflix because of cheap source of TV programming. Such competitive threats from video streaming service providers led to the discontinuation of Shomi video streaming services, which was a major setback.
Further, the company exited 2016 with high debt levels and no cash and cash equivalents on its balance sheet. Accumulating debt and declining cash flow may pose problems for its credit ratings in the upcoming release. We look forward to seeing how far the company succeeds in improving its liquidity scenario in the first quarter, with all its strategic business moves.
In spite of such downturns, shares of Rogers Communications outperformed the Zacks categorized ‘Cable TV Market’s growth in the past three months. The stock grew 15.3%, outshining the industry’s gain of 9.2% over the same time frame.
We are also impressed with Rogers Communications’ efforts to reward its shareholders with a quarterly dividend of 48 cents per share on each of its outstanding Class B Non-Voting shares and Class A Voting shares. The cash dividend was paid on Apr 3, 2017 to shareholders of record on Mar 13, 2017.
Moreover, the company continues to remain the first wireless operator in Canada to offer Internet of Things services like End-to-End Incident Management, Farm & Food Monitoring, and Level Monitoring, to business enterprises. Its decision to purchase broadcasting company, Tillsonburg Broadcasting Company Limited, and its offering of Rogers Unison (a new mobile solution) to small businesses also bode well for high-speed Internet customer growth.
We further believe that the company’s plans to dump its Internet Protocol TV (IPTV) platform and adopt Comcast Corp.’s cloud-based X1 video platform should help it witness growth in its cable segment in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Rogers Communications is likely to beat on earnings 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. That is not the case here, as you will see below.
Zacks ESP: Rogers Communications has an Earnings ESP of -4.65%. This is because the Most Accurate estimate stands at 41 cents while the Zacks Consensus Estimate is pegged at 43 cents.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Rogers Communications currently carries a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Pool Corporation (POOL - Free Report) from the Zacks categorized broader Consumer Discretionary sector has the right combination of elements to post an earnings beat when it expectedly reports first-quarter 2017 results on Apr 20. Pool Corporation has an Earnings ESP of +5.13% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s earnings surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 19.93%
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
Unique Zacks Analysis of Your Chosen Ticker
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Will Rogers Communications (RCI) Disappoint in Q1 Earnings?
Rogers Communications Inc. (RCI - Free Report) , the largest integrated telecom operator in Canada, is slated to report first-quarter 2017 results on Apr 18, after the market closes.
Last quarter, Rogers Communications’ bottom line matched the Zacks Consensus Estimate. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average negative surprise of 6.52%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Rogers Communications continues to face tough competition from market incumbents like TELUS Corp. (TU - Free Report) and BCE Inc. (BCE - Free Report) , and other small regional cable TV operators in the wireless market of Canada. Moreover, Shaw Communications Inc.’s entry into the market with the WIND Mobile acquisition has intensified competition.
Additionally, the company’s media segment remains exposed to persistent softness in the advertising market. Rogers Communications, similar to other cable companies, has lost viewers to video streaming service providers like Netflix because of cheap source of TV programming. Such competitive threats from video streaming service providers led to the discontinuation of Shomi video streaming services, which was a major setback.
Further, the company exited 2016 with high debt levels and no cash and cash equivalents on its balance sheet. Accumulating debt and declining cash flow may pose problems for its credit ratings in the upcoming release. We look forward to seeing how far the company succeeds in improving its liquidity scenario in the first quarter, with all its strategic business moves.
In spite of such downturns, shares of Rogers Communications outperformed the Zacks categorized ‘Cable TV Market’s growth in the past three months. The stock grew 15.3%, outshining the industry’s gain of 9.2% over the same time frame.
We are also impressed with Rogers Communications’ efforts to reward its shareholders with a quarterly dividend of 48 cents per share on each of its outstanding Class B Non-Voting shares and Class A Voting shares. The cash dividend was paid on Apr 3, 2017 to shareholders of record on Mar 13, 2017.
Moreover, the company continues to remain the first wireless operator in Canada to offer Internet of Things services like End-to-End Incident Management, Farm & Food Monitoring, and Level Monitoring, to business enterprises. Its decision to purchase broadcasting company, Tillsonburg Broadcasting Company Limited, and its offering of Rogers Unison (a new mobile solution) to small businesses also bode well for high-speed Internet customer growth.
We further believe that the company’s plans to dump its Internet Protocol TV (IPTV) platform and adopt Comcast Corp.’s cloud-based X1 video platform should help it witness growth in its cable segment in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Rogers Communications is likely to beat on earnings 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. That is not the case here, as you will see below.
Zacks ESP: Rogers Communications has an Earnings ESP of -4.65%. This is because the Most Accurate estimate stands at 41 cents while the Zacks Consensus Estimate is pegged at 43 cents.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Rogers Communications currently carries a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Rogers Communication, Inc. Price and EPS Surprise
Rogers Communication, Inc. Price and EPS Surprise | Rogers Communication, Inc. Quote
A Key Pick
Pool Corporation (POOL - Free Report) from the Zacks categorized broader Consumer Discretionary sector has the right combination of elements to post an earnings beat when it expectedly reports first-quarter 2017 results on Apr 20. Pool Corporation has an Earnings ESP of +5.13% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s earnings surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 19.93%
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>