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Will Liberty Global (LBTYA) Disappoint this Earnings Season?
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Liberty Global plc. (LBTYA - Free Report) , a leading cable TV operator in Europe and Latin America, is scheduled to report third-quarter 2016 results on Nov 3, after market close.
Last quarter, the company posted an impressive positive earnings surprise of 360.00%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 202.22%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Liberty Global’s operation in Europe is a major concern in itself. This is because recessionary pressure, debt crisis and low per capita income are some of the major issues plaguing several European markets. This may impede customer spending on pricey high-speed communication services. Additionally, the markets for video, broadband, fixed-line telephony and mobile services are highly competitive and fast evolving with technological advancements and innovation. Hence, to keep up with the pace, the company has to bear the related expenses of launching the latest technologies. Further, foreign exchange rate risks and integration risks are other major dampeners.
Nevertheless, Liberty Global is expected to benefit from its widespread adoption of broadband and data services in the form of its new launch of DOCSIS 3.1 network services in 2017. Further, the merger and acquisition plans of the company seem impressive. The 50-50 joint venture with Vodafone Group plc (VOD - Free Report) in the Netherlands, the acquisition of UTV Ireland TV stations from ITV, agreement with Netfix and the takeover of Cable & Wireless Communications should drive growth at Liberty Global. Notably, the company has almost 6.1 million WiFi access points in its European footprint and plans to increase its WiFi access points to over 10.0 million in 2016.
In Sep 2016, Liberty Global reached a long-term agreement with Netflix Inc. (NFLX - Free Report) wherein the latter will be allowed to offer its content on the former’s cable network. The service will be available in 30 of the countries Liberty Global operates in, starting from the Netherlands and gradually expanding to other regions.
Earnings Whispers
Our proven model does not conclusively show that Liberty Global 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: Liberty Global has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 1 cent. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Liberty Global has a Zacks Rank #4 (Sell). Please note thatwe caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
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Will Liberty Global (LBTYA) Disappoint this Earnings Season?
Liberty Global plc. (LBTYA - Free Report) , a leading cable TV operator in Europe and Latin America, is scheduled to report third-quarter 2016 results on Nov 3, after market close.
Last quarter, the company posted an impressive positive earnings surprise of 360.00%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 202.22%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Liberty Global’s operation in Europe is a major concern in itself. This is because recessionary pressure, debt crisis and low per capita income are some of the major issues plaguing several European markets. This may impede customer spending on pricey high-speed communication services. Additionally, the markets for video, broadband, fixed-line telephony and mobile services are highly competitive and fast evolving with technological advancements and innovation. Hence, to keep up with the pace, the company has to bear the related expenses of launching the latest technologies. Further, foreign exchange rate risks and integration risks are other major dampeners.
Nevertheless, Liberty Global is expected to benefit from its widespread adoption of broadband and data services in the form of its new launch of DOCSIS 3.1 network services in 2017. Further, the merger and acquisition plans of the company seem impressive. The 50-50 joint venture with Vodafone Group plc (VOD - Free Report) in the Netherlands, the acquisition of UTV Ireland TV stations from ITV, agreement with Netfix and the takeover of Cable & Wireless Communications should drive growth at Liberty Global. Notably, the company has almost 6.1 million WiFi access points in its European footprint and plans to increase its WiFi access points to over 10.0 million in 2016.
In Sep 2016, Liberty Global reached a long-term agreement with Netflix Inc. (NFLX - Free Report) wherein the latter will be allowed to offer its content on the former’s cable network. The service will be available in 30 of the countries Liberty Global operates in, starting from the Netherlands and gradually expanding to other regions.
Earnings Whispers
Our proven model does not conclusively show that Liberty Global 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: Liberty Global has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 1 cent. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Liberty Global has a Zacks Rank #4 (Sell). Please note thatwe caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
LIBERTY GLBL-A Price and EPS Surprise
LIBERTY GLBL-A Price and EPS Surprise | LIBERTY GLBL-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 beat 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>>