Will Scripps Networks (SNI) Miss Earnings This Quarter?

Major lifestyle media company Scripps Networks Interactive Inc. (SNI) is set to release its third-quarter 2014 results before the opening bell on Nov 6.

In the last quarter, the company delivered a positive 0.88% earnings surprise. Also, the company delivered positive earnings surprises in three quarters last year, with an average beat of 1.16%. Let’s see how things are shaping up for this announcement.

Factors to be Considered This Quarter

Scripps Networks’ future plans primarily involve the monetization of its video-on-demand (VOD) content. In synergy with the cable TV industry’s latest TVEverywhere technology, Scripps Networks is making its content available for this platform. The company is also rolling out a series of websites and mobile applications through which subscribers can view the company’s channels on mobile devices.

Earlier, Scripps Networks had signed agreements with two large cable TV operators, namely, Comcast and Time Warner Cable on VOD advertising program and has extended its existing 2-year contract with Clearleap.

Earnings Whispers

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

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, currently stands at -2.38%, as the Most Accurate Estimate is pegged at 82 cents while the Zacks Consensus Estimate is higher at 84 cents.

Zacks Rank: Scripps Networks’ Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.

Stocks to Consider

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

SIRIUS XM Holdings Inc. (SIRI) with an earnings ESP of +50.00% and a Zacks Rank #2 (Buy).

The Walt Disney Company (DIS) with an earnings ESP of +1.14% and a Zacks Rank #3 (Hold).

DragonWave Inc. (DRWI) with an earnings ESP of +16.67% and a Zacks Rank #3.