Major lifestyle media company Scripps Networks Interactive Inc. SNI is set to release its second-quarter 2015 results before the opening bell on Aug 4.
In the last quarter, the company posted a positive 12.09% earnings surprise. Also, Scripps Networks registered positive earnings surprises in three quarters last year, with an average beat of 8.05%. Let’s see how things are shaping up for this announcement.
Factors to be Considered
Recently, Scripps Networks wrapped up a 52.7% stake buy in Poland’s popular multi-platform media company, TVN. This acquisition is expected to strengthen Scripps Networks’ presence in Europe considerably. Moreover, the media market in Poland offers strong growth potential and will enhance Scripps Networks’ advertising market opportunities to a great extent.
However, rising service and selling expenses, along with a weak advertising market, will continue to hurt margins for Scripps Networks. Moreover, the company’s efforts to expand its business across Europe may expose it to foreign currency exchange rate risks.
Earnings Whispers
Our proven model does not conclusively show that Scripps Networks is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or at least 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: Scripps Networks has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at $1.26.
Zacks Rank: Scripps Networks carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s 0.00% 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 to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.
The Walt Disney Co. DIS has an earnings ESP of +2.16% and a Zacks Rank #3.
Sprint Corp. S has an earnings ESP of +25.0% and a Zacks Rank #3.
Ashford Hospitality Trust, Inc. AHT has an earnings ESP of +4.35% and a Zacks Rank #1 (Strong Buy).
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