Media giant, The Walt Disney Company DIS, is set to report its second-quarter fiscal 2015 results on May 5. Last quarter, it posted a positive earnings surprise of 17.6%. Let us see how things are developing for this announcement.
Factors to Consider This Quarter
Rising programming costs and currency headwinds might prove a drag. Moreover, tougher year-over-year comparison with Frozen might dent studio segment’s revenues.
Earnings Whispers
Our proven model does not conclusively project Disney as likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and Zacks Rank #1 #2 or #3 for this to happen. This is not the case here as you will see below.
Zacks ESP: ESP for Disney is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.11.
Zacks Rank: Disney’s Zacks Rank #2 (Buy) increases the predictive power of ESP. However, we need to have a positive ESP to be confident of 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 seeing 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:
Skullcandy, Inc. SKUL with an Earnings ESP of +7.69% holds a Zacks Rank #2 (Buy).
Tyson Foods, Inc. TSN has an Earnings ESP of +1.35% and a Zacks Rank #3 (Hold).
Twenty-First Century Fox, Inc. FOXA has an Earnings ESP of +2.56% and a Zacks Rank #3.
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