Lions Gate Entertainment Corp. (LGF), producer and distributor of motion pictures for theatrical and straight-to-video release, is set to report its second-quarter fiscal 2015 results on Nov 6, 2014. Last quarter, it posted a positive earnings surprise of 107.7%. Let's see how things are developing for this announcement.
Factors Affecting the Quarter
Weak box office response to Expendables 3 is likely to impact earnings negatively in this relatively ordinary quarter. Smaller releases opened to mixed reviews, while nothing exceptionally credible happened on the television front. However, the second half is promising as the highly anticipated Hunger Games: Mockingjay Part 1 releases on Nov 21, 2014.
Earnings Whispers
Our proven does not conclusively project Lions Gate Entertainment as likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: ESP for Lions Gate Entertainment is -23.08%. This is because the Most Accurate estimate stands at 10 cents and the Zacks Consensus Estimate stands at 13 cents.
Zacks Rank: Lions Gate Entertainment’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows these to have the right combination of elements to post an earnings beat:
CST Brands, Inc. (CST) has an Earnings ESP of +8.93% and a Zacks Rank #2.
Dean Foods Company (DF) has an Earnings ESP of +15.39% and a Zacks Rank #3.
Discovery Communications, Inc. (DISCA) has an Earnings ESP of +2.44% and a Zacks Rank #3.
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