Time Inc. (TIME) is slated to report its third-quarter 2014 results on Nov 4, before the opening bell. In the last quarter, the company had delivered a significant positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
Time Inc. was spun off from Time Warner Inc. (TWX) in Jun 2014. This is going to be the second quarterly earnings of the company since then. Time Inc. is in the transformation phase as the company is expanding its brands, undertaking the development of other business opportunities and heading towards a more active operating culture.
Though the company performed well in the previous quarter, it is still in its nascent stages of development and is battling secular headwinds of the print media industry. Hence, we remain cautious about its performance this quarter.
Earnings Whispers?
Our proven model shows that Time Inc. is likely to miss earnings estimates this quarter. This is because the stock has a negative Earnings ESP and a Zacks Rank #5 (Strong Sell).
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at -2.78%. This is because the Most Accurate Estimate of 35 cents stands below the Zacks Consensus Estimate of 36 cents.
Zacks Rank: Time Inc. carries a Zacks Rank #5. We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
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 this quarter:
Best Buy Co., Inc. (BBY) has an Earnings ESP of +4.17% and a Zacks Rank #2 (Buy).
The Kroger Co. (KR) has an Earnings ESP of +3.28% and a Zacks Rank #2.
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