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Can Scripps Networks (SNI) Spring a Surprise in Q1 Earnings?
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Scripps Networks Interactive, Inc. is scheduled to release first-quarter 2017 financial numbers on May 4, before the opening bell.
In the last quarter, the company posted a negative earnings surprise of 2.86%. The company’s earnings (excluding special items) of $1.02 per share fell short of the Zacks Consensus Estimate of $1.05. Also, the bottom line declined 24.4% on a year-over-year basis due to higher costs. The company’s fourth-quarter operating revenues of $888.7 million beat the Zacks Consensus Estimate of $881.2 million. Revenues were up 4.3% year over year on strong TV advertising revenues in the U.S.
Shares of Scripps Networks underperformed the Zacks categorized Broadcast Radio and Television industry over the last three months. The stock lost 1.35% while the industry gained 7.34%.
Factors at Play
Scripps Networks is highly exposed to foreign currency exchange rate risks due to its presence in Europe and Asia. Moreover, acquisition of other media companies will also lead to integration risk for the company. Headwinds like mounting programming costs might hurt the stock in the first quarter.Additionally, the lifestyle programming market is highly competitive. Scripps Networks is a highly leveraged company. This is indicated by the fact that the ratio of its long-term debt-to-equity (expressed as a percentage) is currently well over 100. This compares unfavorably with the figure of 82.37% for the S&P 500 index.
However, we are impressed by the company's decision made in February to hike its quarterly dividend by 20%.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for Scripps Networksthis 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: Scripps Networks has an earnings ESP of -0.85%. This is because the Most Accurate estimate is pegged at $1.17 per share, while the Zacks Consensus Estimate is $1.18. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Scripps Networks has a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Scripps Networks Interactive, Inc Price and EPS Surprise
Investors interested in the broader consumer discretionary sector may consider the following stocks. This is because our model shows that these companies possess the right combination of elements to post an earnings beat this quarter.
Adidas AG (ADDYY - Free Report) has an Earnings ESP of 0.94% and a Zacks Rank #2. The company will report first-quarter results on May 4.
AMC Networks Inc. (AMCX - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3. The company will report first-quarter results on May 4.
Now. Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Can Scripps Networks (SNI) Spring a Surprise in Q1 Earnings?
Scripps Networks Interactive, Inc. is scheduled to release first-quarter 2017 financial numbers on May 4, before the opening bell.
In the last quarter, the company posted a negative earnings surprise of 2.86%. The company’s earnings (excluding special items) of $1.02 per share fell short of the Zacks Consensus Estimate of $1.05. Also, the bottom line declined 24.4% on a year-over-year basis due to higher costs. The company’s fourth-quarter operating revenues of $888.7 million beat the Zacks Consensus Estimate of $881.2 million. Revenues were up 4.3% year over year on strong TV advertising revenues in the U.S.
Shares of Scripps Networks underperformed the Zacks categorized Broadcast Radio and Television industry over the last three months. The stock lost 1.35% while the industry gained 7.34%.
Factors at Play
Scripps Networks is highly exposed to foreign currency exchange rate risks due to its presence in Europe and Asia. Moreover, acquisition of other media companies will also lead to integration risk for the company. Headwinds like mounting programming costs might hurt the stock in the first quarter.Additionally, the lifestyle programming market is highly competitive. Scripps Networks is a highly leveraged company. This is indicated by the fact that the ratio of its long-term debt-to-equity (expressed as a percentage) is currently well over 100. This compares unfavorably with the figure of 82.37% for the S&P 500 index.
However, we are impressed by the company's decision made in February to hike its quarterly dividend by 20%.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for Scripps Networksthis 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: Scripps Networks has an earnings ESP of -0.85%. This is because the Most Accurate estimate is pegged at $1.17 per share, while the Zacks Consensus Estimate is $1.18. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Scripps Networks has a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Scripps Networks Interactive, Inc Price and EPS Surprise
Scripps Networks Interactive, Inc Price and EPS Surprise | Scripps Networks Interactive, Inc Quote
Stocks to Consider
Investors interested in the broader consumer discretionary sector may consider the following stocks. This is because our model shows that these companies possess the right combination of elements to post an earnings beat this quarter.
Adidas AG (ADDYY - Free Report) has an Earnings ESP of 0.94% and a Zacks Rank #2. The company will report first-quarter results on May 4.
AMC Networks Inc. (AMCX - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3. The company will report first-quarter results on May 4.
Central Garden & Pet Company (CENT - Free Report) has an Earnings ESP of +4.69% and a Zacks Rank #2. The company will report fiscal second-quarter results on May 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sell These Stocks.
Now. Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.