Will Carmike Cinemas (CKEC) Miss Earnings Estimates in Q2?

Carmike Cinemas Inc. (CKEC) is set to release second-quarter 2014 results after the market closes on Aug 4, 2014.

In the last quarter, the company delivered a 300.00% earnings surprise with an average beat of negative 88.03% in the last four quarters. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Carmike Cinemas is poised for improved financial results mainly buoyed by hit movie releases this summer.

However, volatility in the movie industry, increasing maintenance costs and stiff competition from other theatrical and low-cost video streaming companies will continue to hurt the Carmike’s profitability going forward.

Earnings Whispers

Our proven model does not conclusively show that Carmike 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 3 for this to happen. That is not the case here, as you will see below:

Negative Zacks ESP: This is because the Most Accurate Estimate is pegged at 31 cents while the Zacks Consensus Estimate is higher at 35 cents. This leads to an ESP of -11.43% for Carmike.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

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.

Dish Network Corp. (DISH) has an Earnings ESP of +15.39% and a Zacks Rank #3 (Hold).

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

Digital Cinema Destinations Corp. (DCIN) has an earnings ESP of +66.67% and a Zacks Rank #3.