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Shaw Communications (SJR) Q1 Earnings: What's in Store?
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Shaw Communications Inc. is scheduled to release first-quarter fiscal 2017 results before the opening bell on Jan 12.
Last quarter, Shaw Communications posted a negative earnings surprise of 4.35%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 1.31%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
We are impressed with Shaw Communications’ ongoing efforts to reward its shareholders through dividend payments.
On Dec 16, 2016, Shaw Communications announced that its eligible shareholders who are residents of the United States can now enroll their Class A Participating Shares (Class A Shares) and Class B Non-Voting Participating Shares (Class B Shares) in their dividend reinvestment plan (Plan). Since its launch in 2008, this Plan was available only to shareholders who were residents of Canada. The Plan provides a convenient way for the participants to reinvest cash dividends paid on their Class A Shares and/or Class B Shares to purchase additional Class B Shares without brokerage commissions, fees or transaction costs.
On Nov 2, 2016, the board of directors of Shaw Communications declared monthly dividends of $0.09875 on Class B Non-Voting Participating Shares and $0.098542 on Class A Participating Shares. The dividends were paid on Dec 29, 2016, Jan 30, 2017 and Feb 27, 2017 to holders of record at the closure of business on Dec 15, 2016, Jan 13, 2017 and Feb 15, 2017, respectively.
The divestiture of Shaw Communications’ subsidiary Shaw Media Inc. to Corus Entertainment Inc. had already placed it as a pure-play Canadian telecom company with a solid growth profile. Further, the company’s venture into the Canadian wireless market is likely to prove beneficial. The launch of the mobile TV platform – FreeRange TV – and its SmartWiFi and SmartSecurity Services should gain traction as well. The company is also launching high-speed Internet services like WideOpen Internet 150 and entering into tie-ups to boost its cloud suite.
Inspite of such positives, shares of Shaw Communications have failed to beat the Zacks-categorized ‘Cable TV' industry’s performance in the past one year. The stock has gained 26.52% while the industry registered growth of 27.99%.
However, the company operates in a highly competitive wireless market with incumbents like Rogers Communications Inc. (RCI - Free Report) and TELUS Corp. (TU - Free Report) ). Stiff competition has resulted in loss in its video, Internet and landline phone business line. Moreover, high debts, escalating capital expenditure, a deteriorating cash position, expenses related to the rolling out of new brands, and promotional costs may act as headwinds.
Earnings Whispers
Our proven model does not conclusively show that Shaw 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: Shaw Communications has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 23 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Shaw Communications has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we 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.
One stock to consider ahead of earnings in the telecommunication sector is the national wireless carrier T-Mobile US Inc. (TMUS - Free Report) . Its earnings outperformed the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 107.70%. We are also hopeful that the company will keep its positive surprise streak alive when it reports first-quarter 2017 results on Feb 15. Not only does T-Mobile US have an Earnings ESP of +3.33%, it also carries a favorable Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Shaw Communications (SJR) Q1 Earnings: What's in Store?
Shaw Communications Inc. is scheduled to release first-quarter fiscal 2017 results before the opening bell on Jan 12.
Last quarter, Shaw Communications posted a negative earnings surprise of 4.35%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 1.31%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
We are impressed with Shaw Communications’ ongoing efforts to reward its shareholders through dividend payments.
On Dec 16, 2016, Shaw Communications announced that its eligible shareholders who are residents of the United States can now enroll their Class A Participating Shares (Class A Shares) and Class B Non-Voting Participating Shares (Class B Shares) in their dividend reinvestment plan (Plan). Since its launch in 2008, this Plan was available only to shareholders who were residents of Canada. The Plan provides a convenient way for the participants to reinvest cash dividends paid on their Class A Shares and/or Class B Shares to purchase additional Class B Shares without brokerage commissions, fees or transaction costs.
On Nov 2, 2016, the board of directors of Shaw Communications declared monthly dividends of $0.09875 on Class B Non-Voting Participating Shares and $0.098542 on Class A Participating Shares. The dividends were paid on Dec 29, 2016, Jan 30, 2017 and Feb 27, 2017 to holders of record at the closure of business on Dec 15, 2016, Jan 13, 2017 and Feb 15, 2017, respectively.
The divestiture of Shaw Communications’ subsidiary Shaw Media Inc. to Corus Entertainment Inc. had already placed it as a pure-play Canadian telecom company with a solid growth profile. Further, the company’s venture into the Canadian wireless market is likely to prove beneficial. The launch of the mobile TV platform – FreeRange TV – and its SmartWiFi and SmartSecurity Services should gain traction as well. The company is also launching high-speed Internet services like WideOpen Internet 150 and entering into tie-ups to boost its cloud suite.
Inspite of such positives, shares of Shaw Communications have failed to beat the Zacks-categorized ‘Cable TV' industry’s performance in the past one year. The stock has gained 26.52% while the industry registered growth of 27.99%.
However, the company operates in a highly competitive wireless market with incumbents like Rogers Communications Inc. (RCI - Free Report) and TELUS Corp. (TU - Free Report) ). Stiff competition has resulted in loss in its video, Internet and landline phone business line. Moreover, high debts, escalating capital expenditure, a deteriorating cash position, expenses related to the rolling out of new brands, and promotional costs may act as headwinds.
Earnings Whispers
Our proven model does not conclusively show that Shaw 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: Shaw Communications has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 23 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Shaw Communications has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we 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.
Shaw Communications Inc. Price and EPS Surprise
Shaw Communications Inc. Price and EPS Surprise | Shaw Communications Inc. Quote
A Key Pick
One stock to consider ahead of earnings in the telecommunication sector is the national wireless carrier T-Mobile US Inc. (TMUS - Free Report) . Its earnings outperformed the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 107.70%. We are also hopeful that the company will keep its positive surprise streak alive when it reports first-quarter 2017 results on Feb 15. Not only does T-Mobile US have an Earnings ESP of +3.33%, it also carries a favorable Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>