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Marriott Vacations (VAC) Q2 Earnings: What's in the Cards?

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Marriott Vacations Worldwide Corp. (VAC - Free Report) is scheduled to report second-quarter 2017 numbers on Aug 3, before the opening bell.

Last quarter, this Florida-based vacation ownership company delivered a positive earnings surprise of 3.39%. However, the trailing four-quarter average earnings surprise is a negative 1.95%.

Let’s see how things are shaping up for this announcement.

Marriot Vacations Worldwide Corporation Price and EPS Surprise


Factors to Consider

Marriott Vacations, one of the major players in the timeshare industry, is poised to benefit from positive timeshare industry trends. The company has been able to maintain a steady flow of clients by offering tours to diverse locations and programs with greater outreach.

Marriott Vacations expects to continue driving contract sales and rental revenues in the second quarter via its two major growth initiatives. The first being tours from marketing programs, namely call transfer and universal encore programs and secondly, by additional sales distributions at its new locations.

In fact, the last quarter was the first full quarter when Marriott Vacations had all its new distribution points open and these drove roughly 7 percentage points of contract sales growth in the U.S. This promising performance is expected to continue into the second quarter as well.

Nevertheless, as the timeshare industry is extensively marketing-oriented and relies heavily on sales initiatives to attract customers, the company’s increased marketing expenses might pressurize the second-quarter margins.

Earnings Whispers

Our proven model does not conclusively show earnings beat for Marriott Vacations 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. That is not the case here, as you will see below.

Zacks ESP: Marriott Vacations has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.26 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Marriott Vacations carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

Note that 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 revision.

Stocks to Consider

Here are some companies in the Consumer Discretionary sector to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Time Warner Inc. has an Earnings ESP of +1.68% and a Zacks Rank #2.

Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMC Networks Inc. (AMCX - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #3.

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