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Charter Communications (CHTR): Earnings Preview for Q3
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Charter Communications Inc. (CHTR - Free Report) , the second largest cable MSO in the U.S., is slated to report third-quarter 2016 results on Nov 3, before the opening bell.
Last quarter, the company posted an impressive positive earnings surprise of 350.00%. However, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 139.38%. Let’s see how things are shaping up for this announcement.
Factors at Play
Charter Communications is facing stiff competition from online video streaming service providers such as Netflix Inc. (NFLX - Free Report) , Hulu.com, YouTube etc. as they provide an extremely cheap source of TV programming. Notably, the over the top business model is gaining momentum, threatening the pay TV model. Additionally, the multi-channel video market in the U.S. is almost saturated. Furthermore, gaining customers from competitors is a difficult task as most pay-TV operators are offering innovative packages. Moreover Charter Communications has a highly leveraged balance sheet.
However, the acquisition of two U.S. cable operators – Time Warner Cable and Bright House Networks -- will strengthen the company’s foothold in hybrid fiber coax (HFC) and fiber networks. This should also help Charter Communications better address small and medium-sized business (SMB) and large businesses. The company is also adopting various initiatives to improve its Spectrum products and cloud-based user interfaces. Also, accelerated residential and commercial customer growth, investments in business services division and rollout of several initiatives bode well.
Recently, Charter Communications announced that it has selected ARRIS International plc. (ARRS), leading customer premises equipment (CPE) manufacturer for the cable TV industry, as its vendor partner for the cable MSO’s next-generation WorldBox 2.0 set-top box. The company also announced plans to foray into the wireless service business next year, following the footsteps of rival Comcast Corporation (CMCSA - Free Report) . Toward this end, Charter Communications will utilize the Mobile Virtual Network Operator (MVNO) agreement that Time Warner Cable had signed with Verizon Communications in 2012.
Earnings Whispers
Our proven model does not conclusively show that Charter Communications 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: Charter Communications has an earnings ESP of +22.58%. This is because the Most Accurate estimate stands at 76 cents while the Zacks Consensus Estimate is pegged lower at 62 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Charter Communications has a Zacks Rank #4 (Sell). Please note thatwe 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 momentum.
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Verizon Communications Inc. (VZ - Free Report) , with an earnings ESP of +1.11% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
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Charter Communications (CHTR): Earnings Preview for Q3
Charter Communications Inc. (CHTR - Free Report) , the second largest cable MSO in the U.S., is slated to report third-quarter 2016 results on Nov 3, before the opening bell.
Last quarter, the company posted an impressive positive earnings surprise of 350.00%. However, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 139.38%. Let’s see how things are shaping up for this announcement.
Factors at Play
Charter Communications is facing stiff competition from online video streaming service providers such as Netflix Inc. (NFLX - Free Report) , Hulu.com, YouTube etc. as they provide an extremely cheap source of TV programming. Notably, the over the top business model is gaining momentum, threatening the pay TV model. Additionally, the multi-channel video market in the U.S. is almost saturated. Furthermore, gaining customers from competitors is a difficult task as most pay-TV operators are offering innovative packages. Moreover Charter Communications has a highly leveraged balance sheet.
However, the acquisition of two U.S. cable operators – Time Warner Cable and Bright House Networks -- will strengthen the company’s foothold in hybrid fiber coax (HFC) and fiber networks. This should also help Charter Communications better address small and medium-sized business (SMB) and large businesses. The company is also adopting various initiatives to improve its Spectrum products and cloud-based user interfaces. Also, accelerated residential and commercial customer growth, investments in business services division and rollout of several initiatives bode well.
Recently, Charter Communications announced that it has selected ARRIS International plc. (ARRS), leading customer premises equipment (CPE) manufacturer for the cable TV industry, as its vendor partner for the cable MSO’s next-generation WorldBox 2.0 set-top box. The company also announced plans to foray into the wireless service business next year, following the footsteps of rival Comcast Corporation (CMCSA - Free Report) . Toward this end, Charter Communications will utilize the Mobile Virtual Network Operator (MVNO) agreement that Time Warner Cable had signed with Verizon Communications in 2012.
Earnings Whispers
Our proven model does not conclusively show that Charter Communications 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: Charter Communications has an earnings ESP of +22.58%. This is because the Most Accurate estimate stands at 76 cents while the Zacks Consensus Estimate is pegged lower at 62 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Charter Communications has a Zacks Rank #4 (Sell). Please note thatwe 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 momentum.
CHARTER COMM-A Price and EPS Surprise
CHARTER COMM-A Price and EPS Surprise | CHARTER COMM-A Quote
Stock to Consider
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Verizon Communications Inc. (VZ - Free Report) , with an earnings ESP of +1.11% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>