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Will Q4 Earnings Hold a Surprise for Viacom (VIAB) Stock?

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Viacom Inc. (VIAB - Free Report) is set to release fourth-quarter fiscal 2016 results, before the opening bell, on Nov 9.

Last quarter, the company beat the Zacks Consensus Estimate by 2.94%. Viacom surpassed estimates in three of the last four quarters with an average beat of 0.64%. Let’s see how things are shaping up for this announcement.

Factors at Play
Viacom’s fiscal fourth-quarter results are likely to benefit from cost-cutting measures and operational efficiency efforts by the company. The company has been taking active measures to improve its customer base and top-line growth and hence, has inked a string of deals with leading media players. The renewed network agreement with Verizon Communications Inc. (VZ - Free Report) and content sharing deal with Sony Corporation (SNE - Free Report) deserve mention in this regard.

However, the company’s results might be affected by the several changes in management. Although ironing out of corporate issues should be favorable, we are wait to see the impact of these changes on the company’s top line in fiscal fourth quarter. Additionally, Viacom faces tough competition from peers like Time Warner Inc. , The Walt Disney Company and Discovery Communications Inc. Viacom expects adjusted diluted earnings per share for the fiscal fourth quarter to be in the range of 65 cents to 70 cents.

Earnings Whispers

Our proven model does not conclusively show that Viacom 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 at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Earnings ESP for the company currently stands at 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 65 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: Viacom carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here

Please note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

VIACOM INC-B Price and EPS Surprise


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