DreamWorks Animation SKG Inc. DWA is set to release first-quarter 2015 results after the market closes on Apr 30.
In the last quarter, the company posted a positive 76.19% earnings surprise. Let’s see how things are shaping up for this announcement.
Factors at Play
DreamWorks lacks business diversification as the company’s Feature Film segment contributes nearly 75% of its total revenue. Except for the recently released “Home”, the company has no movie lined up for release this year. Moreover, higher promotion and distribution expenses may hurt the company’s business in the future.
Earnings Whispers
Our proven model does not conclusively show that DreamWorks is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Thus, the ESP for the company currently stands at -46.67% as the Most Accurate estimate is pegged at 66 cents while the Zacks Consensus Estimate is lower at 45 cents.
Zacks Rank: DreamWorks carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Please note that Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
Groupon, Inc. GRPN with an Earnings ESP of +50.00% and a Zacks Rank #1.
Twenty-First Century Fox, Inc. FOXA with an Earnings ESP of +2.56% and a Zacks Rank #3.
Facebook, Inc. FB with an Earnings ESP of +3.33% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment