The New York Times Company (NYT) is slated to report fourth-quarter 2014 results on Feb 3. In the last quarter, it posted a positive surprise of 400%. Let’s see how things are shaping up for this announcement.
Factors Affecting This Quarter
Of late, The New York Times Company has been adding diverse revenue streams, including a pay-and-read model for NYTimes.com and the International New York Times. Nonetheless, advertising remains a significant revenue source for the company, which, however, depends on the health of the economy. The company had earlier hinted that total advertising revenue in the fourth quarter would decline in the mid-single-digit range.
Earnings Whispers?
Our proven model does not conclusively show that The New York Times 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: Earnings ESP for The New York Times is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 23 cents.
Zacks Rank: The New York Times carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, 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.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Thomson Reuters Corporation (TRI) has an Earnings ESP of +2.08% and a Zacks Rank #3.
Chipotle Mexican Grill, Inc. (CMG) has an Earnings ESP of +3.18% and a Zacks Rank #2 (Buy).
Archer-Daniels-Midland Company (ADM) has an Earnings ESP of +3.30% and a Zacks Rank #3.
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