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Sirius XM (SIRI) to Report Q3 Earnings: What's in Store?

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Sirius XM Holdings (SIRI - Free Report) is scheduled to report third-quarter 2018 results on Oct 24.

The company has beaten the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive earnings surprise of 17.50%. In the last reported quarter, the company’s adjusted earnings of 5 cents were in line with the Zacks Consensus Estimate.

The Zacks Consensus Estimate for third-quarter earnings and revenues is currently pegged at 6 cents and $1.46 billion, respectively.

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

Factors to Consider

Sirius XM’s healthy net subscriber growth is likely to drive third-quarter 2018 results. The company added 483K net new self-pay subscribers, totalling 28.2 million self-pay subscribers in the second quarter.
 

 

Solid new car as well as used car conversion rates significantly contributed to self-pay subscriber growth. Moreover, improving new and used car penetration bodes well for the company.

Notably, in May, Sirius XM launched iOS and Android apps, which received a positive feedback from users. Following the launch of the redesigned application, on-demand listening has increased 60%.

However, Amazon’s foray into the infotainment market does not bode well for Sirius. Moreover, high royalty cost is likely to hurt the company's profitability amid stiff competition. Additionally, its streaming efforts lagged amid increasing competition from the likes of Apple and Spotify.

What Our Model Says

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

Sirius has a Zacks Rank #2 (Buy) and an Earnings ESP of +3.45%, 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 to Consider

Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Cable One (CABO - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

HubSpot (HUBS - Free Report) has an Earnings ESP of +136.36% and a Zacks Rank #2.

Apple (AAPL - Free Report) has an Earnings ESP of +2.45% and a Zacks Rank #2.

 

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