Back to top

Shaw Communications: Will It Beat Earnings?

Read MoreHide Full Article

Canada-based Shaw Communications Inc. (SJR - Free Report) is set to release its second-quarter 2013 results before the opening bell on Apr 12, 2013.

In the last quarter, the company delivered a 11.11% positive earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Shaw Communications is continuously deploying its high-speed DOCSIS 3.0 network in several western Canadian markets under the brand name “Nitro Internet Service”. This technology offers a 100 Mbps download speed. Moreover, the company is also expanding its Wi-Fi network.

Such aggressive rollout of high-speed technology coupled with the acquisition of Canwest Global Communications Corp. (inclusive of GlobalTV network) will certainly position Shaw Communications as one of the leading entertainment and communications companies in the Canadian broadcasting industry.

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 Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: This is because the Most Accurate estimate is 34 cents below the Zacks Consensus Estimate of 36 cents. This leads to an ESP of -5.56% for Shaw.

Zacks Rank #3 (Hold): Shaw’s Zacks Rank #3, decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -5.56% combined with Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Netflix Inc. (NFLX - Free Report) has Earnings ESP of +5.56% and carries a Zacks Rank #1 (Strong Buy).

CBS Corporation (CBS - Free Report) has Earnings ESP of +1.47% and carries a Zacks Rank #2 (Buy).

MetroPCS Communications Inc. has Earnings ESP of +100.00% and carries a Zacks Rank #3 (Hold).

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Shaw Communications Inc. (SJR) - free report >>

Netflix, Inc. (NFLX) - free report >>

CBS Corporation (CBS) - free report >>

More from Zacks Analyst Blog

You May Like