One of the leading toymakers, Hasbro, Inc. (HAS Quick QuoteHAS - Free Report) , is scheduled to report second-quarter 2017 results on Jul 24, before the opening bell.

Last quarter, Hasbro delivered a positive earnings surprise of 16.22%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters, with an average beat of 16.54%.

Let’s see how things are shaping up for this announcement.

Hasbro, Inc. Price and EPS Surprise

 

Hasbro, Inc. Price and EPS Surprise | Hasbro, Inc. Quote

Factors Likely to Influence Q2 Results

Hasbro’s earnings and revenues surpassed the Zacks Consensus Estimate in all the trailing nine quarters. Strategic partnerships, rapid growth in emerging markets, along with various sales-building initiatives have been driving the top and the bottom line. We expect these factors to boost second-quarter results as well. New theatrical releases might further rake in revenues for the company as products related to them roll out globally.

Increased investments in digital initiatives are also likely to drive the quarter’s results. Particularly, the company’s launch of a gaming subscription service named Hasbro Gaming Crate – that delivers a curated collection of new board games directly to consumers’ doorsteps every three months – should propel revenue growth in Hasbro Gaming.

Meanwhile, driven by strong consumer insights, global digital content, innovative products and comprehensive retail execution, Hasbro’s Franchise and Partner Brands are expected to deliver strong results in the to-be-reported quarter.

However, foreign exchange losses remain a cause of concern amid the prevailing challenging domestic sales environment. Additionally, persistent higher costs related to initiatives may hurt the quarter’s margins. Further, weak performances at some of its brands could offset growth derived from other well-performing counterparts.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Hasbro 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 elaborated below.

Zacks ESP: Hasbro has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 46 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hasbro holds a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Time Warner Inc. has an Earnings ESP of +3.39% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Live Nation Entertainment, Inc. (LYV Quick QuoteLYV - Free Report) has an Earnings ESP of +31.25% and a Zacks Rank #3.

Wyndham Worldwide Corporation has an Earnings ESP of +0.67% and a Zacks Rank #3.

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