Will Shaw Communications Beat Earnings?

Canada-based Shaw Communications Inc. (SJR) is set to release its third-quarter 2013 results before the opening bell on Jun 27, 2013.

In the last quarter, the company delivered a 5.56% positive earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Shaw Communications is continuously deploying high-speed DOCSIS 3.0 network in several western Canadian markets under the brand name of “Nitro Internet Service”. This technology offers 100 Mbps download speed. Moreover, the company is also expanding its Wi-Fi network.

Such aggressive rollout of high-speed technology coupled with the acquisition of Canwest Global Communications Corp. (inclusive of GlobalTV network) will certainly position Shaw Communications as one of the leading entertainment and communications companies in the Canadian broadcasting industry.

Earnings Whispers

Our proven model does not conclusively show that Shaw Communications is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate Estimate is at 39 cents, below the Zacks Consensus Estimate of 43 cents. This leads to an ESP of -9.30% for Shaw.

Zacks Rank #3 (Hold): Shaw’s Zacks Rank #3 (Hold), decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -9.30% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Research In Motion Limited (BBRY) has Earnings ESP of +125.00% and carries a Zacks Rank #3 (Hold).

Cablevision Systems Corporation (CVC) has Earnings ESP of +33.33% and carries a Zacks Rank #3 (Hold).

Time Warner Inc. (TWX) has Earnings ESP of +1.33% and carries a Zacks Rank #3 (Hold).

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