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Meredith (MDP) Earnings Likely to Decline in Q2: Here's Why

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Meredith Corporation (MDP - Free Report) is expected to release second-quarter fiscal 2018 results on Jan 24. In the preceding quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 9.5%. Moreover, it had posted an average earnings beat of 7.1% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.

What to Expect?

The current Zacks Consensus Estimate for the quarter under review is 91 cents, reflecting year-over-year decline of 30%. We note that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $416.9 million compared with $442.6 million reported in the year-ago quarter.

Factors Influencing this Quarter

Management had earlier stated that Meredith’s earnings in second-quarter fiscal 2018 are likely to be in the range of 87-92 cents a share, down from $1.30 reported in the prior-year quarter. Sharp decline in earnings projections for the quarter is primarily due to benefits of 54 cents registered in the year-ago period from robust political advertising revenues.

Moreover, with the advancement of technology, the print media is on a decline. Increasing online readership is compelling Meredith to put extra initiative behind its portfolio of magazines. Though the company is expanding its presence in digital presence, it will take time to complete the metamorphosis.

Notably, the company’s strategic initiatives particularly in digital space, brand licensing activities, solid portfolio of television stations and robust earnings surprise history reinforce its position as one of the leading media and marketing companies. Moreover, the company remains optimistic to generate solid no-political adverting revenues in Local Media Group attributable to robust demand for automotive and professional services.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Meredith 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. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Meredith has an Earnings ESP of -0.55%. While the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.

Meredith Corporation Price, Consensus and EPS Surprise

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:

Nexstar Media Group, Inc. (NXST - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Rent-A-Center, Inc. (RCII - Free Report) has an Earnings ESP of +7.95% and a Zacks Rank #3.

Tapestry, Inc. (TPR - Free Report) has an Earnings ESP of + 0.39% and a Zacks Rank #3.

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