Investors are keeping an eye on the Q2 earnings season as it gains momentum. So far, there has been modest improvement compared to the last couple of quarters. Per the latest Zacks Earnings Trends report as of Jul 22, out of the 126 S&P 500 members that have come up with their quarterly numbers, approximately 70.6% have posted positive earnings surprises, while 55.6% beat top-line expectations.
According to the report, earnings for the 126 S&P 500 companies that have reported so far are down 1.1% from the same period last year, while revenues have declined 2.6%.
The report further projects that earnings will decrease 3.4% from the year-ago period for the total S&P 500 companies, and total revenue will fall 0.5%. We observe that this might turn out to be the fifth straight quarter of earnings decline. As the earnings season advances, the scenario will be much more prominent. So, do not be in a rush to count your chickens before they hatch.
In the thick of the Q2 earnings season, the widely diversified Consumer Discretionary sector has grabbed much of the spotlight.
Per the latest report (as of Jul 22, 2016), nearly 22.9% of the Consumer Discretionary companies have already reported their second-quarter results, out of which 100% beat earnings and 50% surpassed revenue estimates. Total earnings for these companies were up 14.4% while revenues inched up 4.4% year over year. Media stocks form a part of the Consumer Discretionary sector.
Let’s take a sneak peek into three media companies lined up to report this week.
CBS Corporation , a mass media company, is slated to report second-quarter 2016 results on Jul 28. Investors are concerned as to whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 5.3%.
CBS Corporation’s sustained focus on improving subscription-based revenues should drive growth in the to-be-reported quarter. The company has an extensive library of premium content that it monetizes over multiple platforms. Moreover, it introduced over-the-top services, namely CBS All Access and CBSN, keeping up with customer demands. The company also launched an independent streaming service for its premier channel, Showtime.
CBS Corporation carries a Zacks Rank #2 (Buy) and has an Earnings ESP of +1.16%. The Zacks Consensus Estimate for the quarter is pegged at 86 cents. (Read more: CBS Corp Q2 Earnings May Beat: Will the Stock Gain?).
World Wrestling Entertainment, Inc. is scheduled to report second-quarter 2016 financial numbers, before the opening bell on Jul 28. In the previous quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 63.6%.
World Wrestling Entertainment is executing a five-part strategy to strengthen and expand the WWE Network, which includes creating new content, implementing programs with higher-customer attraction and retention power, introducing new features, expanding distribution platforms and entering into new regions. All these endeavors helped the company to continue with its positive earnings surprise streak for the third straight quarter, when it reported first-quarter 2016 results.
On the flip side, WWE operates in the highly competitive market of entertainment video. Further, a decline in pay-per-view revenues over the past four years is another major concern for the company.
World Wrestling Entertainment carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the quarter is pegged at 8 cents. (Read more: Can World Wrestling Pull a Surprise with Q2 Earnings?).
Starz , a media and entertainment company, is scheduled to report second-quarter 2016 earnings results on Jul 28.
Our proven model does not conclusively show that Starz is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 for this to happen. This is not the case here as the company’s Earnings ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 56 cents. Starz’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
In the trailing four quarters, the company has missed the Zacks Consensus Estimate by an average of 9.7%.
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Media Stocks to Watch for Earnings on Jul 28: CBS, WWE, STRZA
Investors are keeping an eye on the Q2 earnings season as it gains momentum. So far, there has been modest improvement compared to the last couple of quarters. Per the latest Zacks Earnings Trends report as of Jul 22, out of the 126 S&P 500 members that have come up with their quarterly numbers, approximately 70.6% have posted positive earnings surprises, while 55.6% beat top-line expectations.
According to the report, earnings for the 126 S&P 500 companies that have reported so far are down 1.1% from the same period last year, while revenues have declined 2.6%.
The report further projects that earnings will decrease 3.4% from the year-ago period for the total S&P 500 companies, and total revenue will fall 0.5%. We observe that this might turn out to be the fifth straight quarter of earnings decline. As the earnings season advances, the scenario will be much more prominent. So, do not be in a rush to count your chickens before they hatch.
In the thick of the Q2 earnings season, the widely diversified Consumer Discretionary sector has grabbed much of the spotlight.
Per the latest report (as of Jul 22, 2016), nearly 22.9% of the Consumer Discretionary companies have already reported their second-quarter results, out of which 100% beat earnings and 50% surpassed revenue estimates. Total earnings for these companies were up 14.4% while revenues inched up 4.4% year over year. Media stocks form a part of the Consumer Discretionary sector.
Let’s take a sneak peek into three media companies lined up to report this week.
CBS Corporation , a mass media company, is slated to report second-quarter 2016 results on Jul 28. Investors are concerned as to whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 5.3%.
CBS CORP Price and EPS Surprise
CBS CORP Price and EPS Surprise | CBS CORP Quote
CBS Corporation’s sustained focus on improving subscription-based revenues should drive growth in the to-be-reported quarter. The company has an extensive library of premium content that it monetizes over multiple platforms. Moreover, it introduced over-the-top services, namely CBS All Access and CBSN, keeping up with customer demands. The company also launched an independent streaming service for its premier channel, Showtime.
CBS Corporation carries a Zacks Rank #2 (Buy) and has an Earnings ESP of +1.16%. The Zacks Consensus Estimate for the quarter is pegged at 86 cents. (Read more: CBS Corp Q2 Earnings May Beat: Will the Stock Gain?).
World Wrestling Entertainment, Inc. is scheduled to report second-quarter 2016 financial numbers, before the opening bell on Jul 28. In the previous quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 63.6%.
World Wrestling Entertainment is executing a five-part strategy to strengthen and expand the WWE Network, which includes creating new content, implementing programs with higher-customer attraction and retention power, introducing new features, expanding distribution platforms and entering into new regions. All these endeavors helped the company to continue with its positive earnings surprise streak for the third straight quarter, when it reported first-quarter 2016 results.
On the flip side, WWE operates in the highly competitive market of entertainment video. Further, a decline in pay-per-view revenues over the past four years is another major concern for the company.
World Wrestling Entertainment carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the quarter is pegged at 8 cents. (Read more: Can World Wrestling Pull a Surprise with Q2 Earnings?).
WORLD WRESTLING Price and EPS Surprise
WORLD WRESTLING Price and EPS Surprise | WORLD WRESTLING Quote
Starz , a media and entertainment company, is scheduled to report second-quarter 2016 earnings results on Jul 28.
Our proven model does not conclusively show that Starz is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 for this to happen. This is not the case here as the company’s Earnings ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 56 cents. Starz’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
In the trailing four quarters, the company has missed the Zacks Consensus Estimate by an average of 9.7%.
STARZ-LIB CAP-A Price and EPS Surprise
STARZ-LIB CAP-A Price and EPS Surprise | STARZ-LIB CAP-A Quote
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