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Media Stocks' Earnings Lineup for Oct 25: SJR, WWE, CMCSA, IMAX
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The third-quarter reporting cycle will be seeing releases from 600 companies, including 154 S&P 500 members, this week (Oct 22-26).
Per the latest Earnings Preview (Oct 19), 84 S&P 500 members or 22.3% of the index’s total market capitalization have come out with their quarterly releases. Total earnings of these companies are up 19.2% on a year-over-year basis (82.1% of the companies beat EPS estimates), while total revenues are up 8.4% year over year (61.9% of the companies beat top-line estimates).
Overall third-quarter earnings for S&P 500 companies are anticipated to be up 19.2% from the year-ago quarter on a revenue increase of 7.2%. Growth is expected to be broad-based, with double-digit earnings improvement expected from 10 of the 16 Zacks Sectors, including Consumer Discretionary.
Factors to Watch Out
Media forms a significant part of the Consumer Discretionary sector. The industry has been battling persistent cord-cutting along with stiff competition from streaming services like Netflix, Hulu, HBO and Amazon Prime.
Moreover, increasing programming costs and retransmission fees are expected to drag down profitability of industry participants.
Nevertheless, strong demand for political advertising in the United States is likely to drive media industry results. Furthermore, increasing investments on original content and focus on providing quality entertainment should lead to favorable results for media companies in the near term.
Let us take a look at four media companies that are set to report on Oct 25.
Calgary, Canada-based Shaw Communications is likely to benefit from solid growth in the Wireless business as well as improving customer base in the Wireline Video: Satellite segment.
According to the Zacks model, a company with a Zacks Rank #1, 2 (Buy) or 3 (Hold) has a good chance of beating estimates, if it also has a positive Earnings ESP. Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1.04 billion, which reflects year-over-year growth of 4.8%. Moreover, the consensus mark for earnings has been steady at 27 cents over the past seven days.
Notably, the company’s results surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 18.2%.
Meanwhile, World Wrestling Entertainment’s third-quarter 2018 results are expected to benefit from increasing original content, subscriber growth and rising TV rights fees. Moreover, the company’s initiative to monetize its video content across digital and direct-to-consumer platforms is a key catalyst. (Read More: Check Out WWE's Probability of Beating Q3 Earnings Estimate)
However, World Wrestling also has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
World Wrestling Entertainment, Inc. Price and EPS Surprise
Notably, the company’s results surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 17.7%.
Philadelphia, PA-based Comcast (CMCSA - Free Report) is expected to benefit from an increasing number of high-speed internet subscribers. The cable giant completed rollout of its high-speed gigabit internet service to nearly all 58 million homes and businesses it serves. (Read more: Comcast Set to Report Q3 Earnings: What's in Store?)
However, Comcast has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of -0.46%.
In the trailing four quarters, the company delivered an average positive earnings surprise of 5.5%, beating estimates in each.
Mississauga, Canada-based, IMAX Corporation (IMAX - Free Report) is expected to benefit from growing number of blockbuster movies like Avengers: Infinity War and Incredibles 2. A strong slate of releases, including Mission: Impossible – Fallout as well as local language titles is likely to drive growth in the third quarter.
However, IMAX has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of -4.76%.
The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $80.7 million, which reflects year-over-year decline of 18.3%. Moreover, the consensus mark for earnings has declined by a cent to 11 cents in the past seven days.
Notably, the company’s results surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 69.4%.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Media Stocks' Earnings Lineup for Oct 25: SJR, WWE, CMCSA, IMAX
The third-quarter reporting cycle will be seeing releases from 600 companies, including 154 S&P 500 members, this week (Oct 22-26).
Per the latest Earnings Preview (Oct 19), 84 S&P 500 members or 22.3% of the index’s total market capitalization have come out with their quarterly releases. Total earnings of these companies are up 19.2% on a year-over-year basis (82.1% of the companies beat EPS estimates), while total revenues are up 8.4% year over year (61.9% of the companies beat top-line estimates).
Overall third-quarter earnings for S&P 500 companies are anticipated to be up 19.2% from the year-ago quarter on a revenue increase of 7.2%. Growth is expected to be broad-based, with double-digit earnings improvement expected from 10 of the 16 Zacks Sectors, including Consumer Discretionary.
Factors to Watch Out
Media forms a significant part of the Consumer Discretionary sector. The industry has been battling persistent cord-cutting along with stiff competition from streaming services like Netflix, Hulu, HBO and Amazon Prime.
Moreover, increasing programming costs and retransmission fees are expected to drag down profitability of industry participants.
Nevertheless, strong demand for political advertising in the United States is likely to drive media industry results. Furthermore, increasing investments on original content and focus on providing quality entertainment should lead to favorable results for media companies in the near term.
Let us take a look at four media companies that are set to report on Oct 25.
Calgary, Canada-based Shaw Communications is likely to benefit from solid growth in the Wireless business as well as improving customer base in the Wireline Video: Satellite segment.
The company is likely to deliver a positive earnings surprise in fourth-quarter fiscal 2018 as it has the favorable combination of an Earnings ESP of +1.85% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
According to the Zacks model, a company with a Zacks Rank #1, 2 (Buy) or 3 (Hold) has a good chance of beating estimates, if it also has a positive Earnings ESP. Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1.04 billion, which reflects year-over-year growth of 4.8%. Moreover, the consensus mark for earnings has been steady at 27 cents over the past seven days.
Shaw Communications Inc. Price and EPS Surprise
Shaw Communications Inc. Price and EPS Surprise | Shaw Communications Inc. Quote
Notably, the company’s results surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 18.2%.
Meanwhile, World Wrestling Entertainment’s third-quarter 2018 results are expected to benefit from increasing original content, subscriber growth and rising TV rights fees. Moreover, the company’s initiative to monetize its video content across digital and direct-to-consumer platforms is a key catalyst. (Read More: Check Out WWE's Probability of Beating Q3 Earnings Estimate)
However, World Wrestling also has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
World Wrestling Entertainment, Inc. Price and EPS Surprise
World Wrestling Entertainment, Inc. Price and EPS Surprise | World Wrestling Entertainment, Inc. Quote
Notably, the company’s results surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 17.7%.
Philadelphia, PA-based Comcast (CMCSA - Free Report) is expected to benefit from an increasing number of high-speed internet subscribers. The cable giant completed rollout of its high-speed gigabit internet service to nearly all 58 million homes and businesses it serves. (Read more: Comcast Set to Report Q3 Earnings: What's in Store?)
However, Comcast has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of -0.46%.
Comcast Corporation Price and EPS Surprise
Comcast Corporation Price and EPS Surprise | Comcast Corporation Quote
In the trailing four quarters, the company delivered an average positive earnings surprise of 5.5%, beating estimates in each.
Mississauga, Canada-based, IMAX Corporation (IMAX - Free Report) is expected to benefit from growing number of blockbuster movies like Avengers: Infinity War and Incredibles 2. A strong slate of releases, including Mission: Impossible – Fallout as well as local language titles is likely to drive growth in the third quarter.
However, IMAX has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of -4.76%.
The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $80.7 million, which reflects year-over-year decline of 18.3%. Moreover, the consensus mark for earnings has declined by a cent to 11 cents in the past seven days.
IMAX Corporation Price and EPS Surprise
IMAX Corporation Price and EPS Surprise | IMAX Corporation Quote
Notably, the company’s results surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 69.4%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>