Time Warner Inc. (TWX), the media and entertainment conglomerate, is slated to release its fourth-quarter and full-year 2013 results on Feb 5, 2014. In the previous quarter, it reported a positive earnings surprise of 13.5%. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter
The New York-based company posted strong third-quarter 2013 earnings due to strength witnessed across the Networks segment and lower shares outstanding. Adjusted operating income and margin both increased during the quarter. Investments in programming, production and marketing, along with a focus on operating and capital efficiencies have served the company well.
Earnings Whispers?
Our proven model does not conclusively show that Time Warner is likely to beat earnings 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: ESP for Time Warner is 0.00%. This is because the Most Accurate estimate falls in line with the Zacks Consensus Estimate of $1.15.
Zacks Rank #3 (Hold): Time Warner’s Zacks Rank #3 when combined with 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows these have the right combination of elements:
Herbalife Ltd. (HLF) has an Earnings ESP of 1.71% and a Zacks Rank #1 (Strong Buy).
Foot Locker Inc. (FL) has an Earnings ESP of 1.33% and a Zacks Rank #2 (Buy).
Finish Line Inc. (FINL) has an Earnings ESP of 1.18% and a Zacks Rank #2 (Buy).
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