Canadian cable multiple-system operator Shaw Communications Inc. (SJR) is slated to report its fourth-quarter fiscal 2014 results on Oct 23, before the opening bell.
In the last reported quarter, the company had delivered a 2.22% negative earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Near-term catalysts include high-speed Internet and telephony subscriber gain, strong EBITDA margin, higher free cash flow outlook, lower churn rate, expansion of Shaw Go Wi-Fi networks, increased number of applications supporting the Shaw Global Go TV Everywhere service and the launch of Anik G1 satellite which allows the company to add over 140 channels for the Shaw Direct service.
Shaw Communications is providing Sault Ste. Marie residents free access to its popular Shaw Go WiFi networks at nearly 900 hotspots. We believe this promotional strategy will not only bolster the company’s top line but also drive subscriber growth and reduce churn rate in the coming quarters. The company expects revenues in fiscal 2014 to increase in the range of 2–4%.
However, stiff competition from other industry players is resulting in persistent loss of video and DTH subscribers. Moreover, considerable debt, rising capital expenditure and deteriorating cash position may act as headwinds for the company, moving ahead.
Earnings Whispers?
Our proven model does not conclusively show that Shaw Communicationsis likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: Shaw Communications has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 33 cents.
Zacks Rank: Shaw Communications carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.
Other Stocks to Consider
Here are some other companies for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:
Ruckus Wireless, Inc. (RKUS) has an earnings ESP of +60.00% and carries a Zacks Rank #3.
DragonWave Inc. (DRWI) has an earnings ESP of +16.67% and carries a Zacks Rank #3.
Liberty Interactive Corporation (QVCA) has an earnings ESP of +10.00% and carries a Zacks Rank #3.
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