Time Inc. TIME, one of the leading media companies, is slated to report third-quarter 2015 results on Nov 5. In the last quarter, the company had delivered a whooping earnings surprise of 107.7%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
Time’s results continue to be marred by secular headwinds. With the shift of most readers to digital media, the print media is on a decline. Moreover, print advertising, which forms a chunk of the company’s revenues, has been displaying a deteriorating trend. This is likely to impact the company’s results in the quarter to be reported.
During second-quarter earnings call, management had reiterated its 2015 guidance and expects revenues to decline in the range of 3% to 6%.
Time acquired three digital sports companies to lay the foundation of Sports Illustrated Play, an extension of Time’s prominent magazine Sports Illustrated. Time also purchased inVNT, an experiential company. These acquisitions will drive the company’s revenue higher.
Earnings Whispers
Our proven model does not conclusively show that Time is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Time is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are at 27 cents.
Zacks Rank: Time carries a Zacks Rank #3 (Hold). We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Facebook, Inc. FB has an Earnings ESP of +5.71% and a Zacks Rank #1 (Strong Buy).
Nexstar Broadcasting Group, Inc. NXST has an Earnings ESP of +14.29% and a Zacks Rank #2 (Buy).
Time Warner Inc. TWX has an Earnings ESP of +0.92% and a Zacks Rank #3.
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