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What's in Store for Shaw Communications (SJR) Q2 Earnings?

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Shaw Communications (SJR - Free Report) is scheduled to release second-quarter fiscal 2019 results on Apr 9.

In the last reported quarter, the company’s adjusted earnings from continuing operations of 28 cents per share surpassed the Zacks Consensus Estimate by 3 cents.

Notably, Shaw Communications has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with average positive earnings surprise of 28.9%.

The Zacks Consensus Estimate for second-quarter earnings has declined by a penny to 22 cents over the past 30 days. Moreover, the figure reflects year-over-year decline of 45%.
 

 

Let’s see how things are shaping up, prior to this announcement.

Factors in Play

Shaw Communications’ wireless business is benefiting from higher post-paid revenue generating units (RGUs) and an improvement in average revenue per unit (ARPU).

Moreover, continued demand for premium smartphones, device pricing and affordable packaging options, data centric plans, and improving network and customer experience are key catalysts.

Further, deployment of 700 MHz spectrum (almost 25% complete at the end of first-quarter 2019) also improves customer experience by providing far-reaching coverage and stronger indoor wireless reception.

Shaw Communications continues to expand its footprint across Canada by opening retail locations at Walmart (WMT - Free Report) . The company operated 240 national retail locations across its footprint with Loblaws’ ‘The Mobile Shop’ and Walmart on a combined basis.

Additionally, Freedom Mobile now has 600 operational retail locations. The company’s wireless operations cover almost half of the Canadian population.

However, Shaw Communications continues to lose subscribers in the wireline segment, which may hurt top-line growth in the to-be-reported quarter. Moreover, margin contraction in the wireline segment, due to challenging consumer video environment, is a major concern.

Nonetheless, the partnership with Comcast (CMCSA - Free Report) , which not only covers broadband but also video, might drive growth in the wireline business.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Shaw Communications has a Zacks Rank #2 and an Earnings ESP of -1.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stock with Favorable Combination

Here is a stock, which, as per our model, has the right combination of elements to post an earnings beat this quarter:

Akamai (AKAM - Free Report) has an Earnings ESP of +5.16% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

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