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Sony (SNE) to Report Q4 Earnings: Surprise in the Cards?
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Sony Corporation is set to report fourth-quarter fiscal 2016 results on Apr 28.
Last quarter, the company reported a negative surprise of 65.8%. Sony has had a choppy earnings surprise history, with two beats for as many misses over the trailing four quarters. Overall, it has an average positive surprise of 60.4% for the same time frame.
Let's see how things are shaping up for this announcement.
Key Factors Influencing Q4
Last week, Sony offered a sneak peek into its fiscal fourth-quarter 2016 and full-year results, as the company released an updated version of its February forecasts. A glimpse at the revised forecasts reveals that Sony expects an improvement in operating income on the back of impressive performances by most segments except Components.
Fourth-quarter fiscal results are likely to benefit from decreased amortization costs and reduction in expenses across all segments, especially Financial Services and Semiconductors.
Meanwhile, the Game & Network Services business is expected to continue to act as the strongest profit churner. Strong sales of the PS4 hardware and software units are expected to drive revenues in the fiscal fourth quarter. As of Feb 19, Sony revealed that PlayStationVR (PS VR) had sold as many as 915,000 units in the four months since its release, a figure that was much higher than the company’s expectations.
Other segments, namely, Music and Financial Services are also expected to boost the top line in the to-be-reported quarter. This apart, Sony’s strategic restructuring actions over the past one year are likely to boost profits. The company has announced a number of “absorption-type company splits” during the quarter to attain a leaner organizational structure.
Despite these positives, the appreciating Yen and weakness in certain end markets are expected to hurt results in the upcoming quarter. Over the past few quarters, the company has been experiencing declining sales at the Components and Pictures segment which is expected to persist in the to-be reported quarter as well.
Also, low demand for mobile sensors, a weak camera module business and softness in the analog LSI business are expected to mar fourth-quarter results. Moreover, losses stemming from the ravage caused by Kumamoto earthquakes will impact the company’s Semiconductor and the Imaging Products & Solutions businesses. This apart, stiff competition and restructuring costs are likely to weigh on the company’s performance.
Earnings Whisper
Our proven model does not conclusively show that Sony will beat earnings estimates in 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. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 7 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Sony has a Zacks Rank #3 which increases the predictive power of the ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Central Garden & Pet Company (CENT - Free Report) has an Earnings ESP of +4.69% and a Zacks Rank #1.
Wolverine World Wide, Inc. (WWW - Free Report) has an Earnings ESP of +3.23% and a Zacks Rank #3.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
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Sony (SNE) to Report Q4 Earnings: Surprise in the Cards?
Sony Corporation is set to report fourth-quarter fiscal 2016 results on Apr 28.
Last quarter, the company reported a negative surprise of 65.8%. Sony has had a choppy earnings surprise history, with two beats for as many misses over the trailing four quarters. Overall, it has an average positive surprise of 60.4% for the same time frame.
Let's see how things are shaping up for this announcement.
Key Factors Influencing Q4
Last week, Sony offered a sneak peek into its fiscal fourth-quarter 2016 and full-year results, as the company released an updated version of its February forecasts. A glimpse at the revised forecasts reveals that Sony expects an improvement in operating income on the back of impressive performances by most segments except Components.
Fourth-quarter fiscal results are likely to benefit from decreased amortization costs and reduction in expenses across all segments, especially Financial Services and Semiconductors.
Meanwhile, the Game & Network Services business is expected to continue to act as the strongest profit churner. Strong sales of the PS4 hardware and software units are expected to drive revenues in the fiscal fourth quarter. As of Feb 19, Sony revealed that PlayStationVR (PS VR) had sold as many as 915,000 units in the four months since its release, a figure that was much higher than the company’s expectations.
Other segments, namely, Music and Financial Services are also expected to boost the top line in the to-be-reported quarter. This apart, Sony’s strategic restructuring actions over the past one year are likely to boost profits. The company has announced a number of “absorption-type company splits” during the quarter to attain a leaner organizational structure.
Despite these positives, the appreciating Yen and weakness in certain end markets are expected to hurt results in the upcoming quarter. Over the past few quarters, the company has been experiencing declining sales at the Components and Pictures segment which is expected to persist in the to-be reported quarter as well.
Also, low demand for mobile sensors, a weak camera module business and softness in the analog LSI business are expected to mar fourth-quarter results. Moreover, losses stemming from the ravage caused by Kumamoto earthquakes will impact the company’s Semiconductor and the Imaging Products & Solutions businesses. This apart, stiff competition and restructuring costs are likely to weigh on the company’s performance.
Earnings Whisper
Our proven model does not conclusively show that Sony will beat earnings estimates in 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. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 7 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sony Corp Ord Price and EPS Surprise
Sony Corp Ord Price and EPS Surprise | Sony Corp Ord Quote
Zacks Rank: Sony has a Zacks Rank #3 which increases the predictive power of the ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Sturm, Ruger & Company, Inc. (RGR - Free Report) has an Earnings ESP of +5.10% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Central Garden & Pet Company (CENT - Free Report) has an Earnings ESP of +4.69% and a Zacks Rank #1.
Wolverine World Wide, Inc. (WWW - Free Report) has an Earnings ESP of +3.23% and a Zacks Rank #3.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
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