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News Corp. (NWSA) Q1 Earnings: Will the Stock Disappoint?

MTN NWSA KORS AMC

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News Corporation (NWSA - Free Report) , the diversified media conglomerate, is slated to report first-quarter fiscal 2017 results on Nov 7. The question lingering in investors’ minds is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, News Corporation underperformed the Zacks Consensus Estimate by an average of 17.5%. Let’s see how things are shaping up prior to this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that News Corporation is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

News Corporation has an Earnings ESP of -100% as the Most Accurate estimate is break-even, while the Zacks Consensus Estimate is pegged at 2 cents. Moreover, the company carries a Zacks Rank #4 (Sell). 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.

Factors Influencing this Quarter

News Corporation is in a transitionary phase, looking to diversify its revenue streams through strategic acquisitions and operational enhancement. The company is expanding its digital offerings, along with greater emphasis on real estate businesses. However, foreign currency headwinds and soft print advertising demand continue to weigh upon the company’s performance to an extent.

Advertising, which forms a major part of News Corporation’s total revenue (approximately 44% of fiscal 2016 total revenue), remains highly vulnerable to the economic conditions. Advertising revenue fell 5% during the final quarter of fiscal 2016 at the News and Information Services segment. Adverse foreign currency fluctuations hurt fourth-quarter total revenue by $54 million.

NEWS CORP NEW-A Price and EPS Surprise

NEWS CORP NEW-A Price and EPS Surprise | NEWS CORP NEW-A Quote

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Vail Resorts Inc. (MTN - Free Report) has an Earnings ESP of +4.46% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Michael Kors Holdings Limited (KORS - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #2.

AMC Entertainment Holdings, Inc. (AMC - Free Report) has an Earnings ESP of +3.57% and a Zacks Rank #3.

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NEWS CORP NEW-A (NWSA) - free report >>

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