Liberty Interactive Corporation (LINTA) is set to release its second-quarter 2014 financial numbers before the opening bell on Aug 5, 2014.
In the last reported quarter, the company’s earnings lagged the Zacks Consensus Estimate by 8.3%. Let’s see how things are shaping up prior to this announcement.
Factors to be Considered this Quarter
The QVC segment's fluctuating growth rate over the last five quarters is a major concern for Liberty Interactive. This segment currently generates approximately 81% of the company’s total revenue and 100% of its operating profits. Therefore, any variation in QVC’s revenues will significantly affect the company’s overall financials.
In the first quarter of 2014, revenues at the QVC segment dropped 27.5% sequentially. This was because revenues from both QVC U.S. and the International segments grew at a sluggish rate during the reported quarter.
Earnings Whispers?
Our proven model does not conclusively show that Liberty Interactive is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 27 cents. This leads to an ESP of 0.00% for Liberty Interactive.
Zacks Rank: Liberty Interactive has a Zacks Rank #3 which when combined with ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision 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.
Windstream Holdings, Inc. (WIN) has an earnings ESP of +12.50% and a Zacks Rank #2.
RigNet, Inc. (RNET) has an earnings ESP of +6.25% and a Zacks Rank #3.
Dish Network Corp. (DISH) has an earnings ESP of +15.39% and a Zacks Rank #3.
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