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What's in Store for Shaw Communications (SJR) in Q3 Earnings?

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Shaw Communications is scheduled to release third-quarter fiscal 2018 results on Jun 28.

In the last reported quarter, the company’s adjusted earnings of 40 cents per share surpassed the Zacks Consensus Estimate by 17 cents. The figure surged almost 68% from the year-ago quarter.

Notably, Shaw Communications has beaten the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive earnings surprise of 13.57%.

The Zacks Consensus Estimate for third-quarter earnings is currently pegged at 28 cents per share.

Let’s see how things are shaping up, prior to this announcement.
 

 

Factors at Play

Shaw Communications’ wireless business is benefiting from higher post-paid revenue generating units (RGUs) and an improvement in average revenue per unit (ARPU). The company’s wireless operations cover almost half of the Canadian population.

Also, the acquisition of Freedom Mobile has been a major growth driver. The acquisition provided Shaw Communications the necessary economies of scale, crucial spectrums, a strong retail distribution chain and an installed base of wireless networks.

Moreover, we are bullish about the company's initiative of deploying 700 MHz and 2500 MHz spectrum, which further improves the network quality.

However, Shaw Communications continues to lose subscribers in the wireline segment, which can hurt top-line growth in the going-to-be-reported quarter. Moreover, margin contraction in the wireline segment, due to challenging consumer video environment, is a major concern.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Shaw Communications has a Zacks Rank #3 and an Earnings ESP of +8.43%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are few stocks which, as per our model, has the right combination of elements to post an earnings beat this quarter:

IMAX Corp (IMAX - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Weight Watchers International (WTW - Free Report) has an Earnings ESP of +1.81% and a Zacks Rank of 1.

Deckers Outdoor (DECK - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank of 1.

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