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Melco Crown (MPEL) Q2 Earnings: Surprise in the Cards?
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Melco Crown Entertainment Limited is scheduled to report second-quarter 2016 numbers on Aug 4, before the opening bell.
Last quarter, Melco Crown posted a 40.00% positive earnings surprise. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 29.72%.
Let’s see how things are shaping up for this announcement.
Melco Crown’s revenues have been hurt by its sluggish performance in Macau over the past few quarters. In fact, revenues in Macau have declined in all of the three months of this quarter due to the anti-graft corruption drive undertaken by the Chinese government, which significantly affected VIP business in the region. We do not expect any significant improvement in the region in the to-be-reported quarter.
Nevertheless, a comparatively better performance at the non-gaming segments like rooms and food and beverages, should somewhat boost the quarter’s revenues. Also, the company’s cost-control efforts including effective management of marketing expenses should boost profits and margins in the to-be reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Melco Crown is likely to beat the Zacks Consensus Estimate 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. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Melco Crown has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 3 cents.
Zacks Rank: Melco Crown has a Zacks Rank #3 which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some restaurant companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
CDK Global, Inc. has an earnings ESP of +2.08% and a Zacks Rank #1.
Qualys, Inc. (QLYS - Free Report) has an earnings ESP of +12.50% and a Zacks Rank #3.
Time Warner Inc. has an earnings ESP of +0.87% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >
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Melco Crown (MPEL) Q2 Earnings: Surprise in the Cards?
Melco Crown Entertainment Limited is scheduled to report second-quarter 2016 numbers on Aug 4, before the opening bell.
Last quarter, Melco Crown posted a 40.00% positive earnings surprise. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 29.72%.
Let’s see how things are shaping up for this announcement.
MELCO CROWN ENT Price and EPS Surprise
MELCO CROWN ENT Price and EPS Surprise | MELCO CROWN ENT Quote
Factors Likely to Influence this Quarter
Melco Crown’s revenues have been hurt by its sluggish performance in Macau over the past few quarters. In fact, revenues in Macau have declined in all of the three months of this quarter due to the anti-graft corruption drive undertaken by the Chinese government, which significantly affected VIP business in the region. We do not expect any significant improvement in the region in the to-be-reported quarter.
Nevertheless, a comparatively better performance at the non-gaming segments like rooms and food and beverages, should somewhat boost the quarter’s revenues. Also, the company’s cost-control efforts including effective management of marketing expenses should boost profits and margins in the to-be reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Melco Crown is likely to beat the Zacks Consensus Estimate 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. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Melco Crown has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 3 cents.
Zacks Rank: Melco Crown has a Zacks Rank #3 which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some restaurant companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
CDK Global, Inc. has an earnings ESP of +2.08% and a Zacks Rank #1.
Qualys, Inc. (QLYS - Free Report) has an earnings ESP of +12.50% and a Zacks Rank #3.
Time Warner Inc. has an earnings ESP of +0.87% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >