Liberty Media Corp. LMCA is slated to release its second-quarter 2015 financial numbers before the opening bell on Aug 5.
Last quarter, the company had delivered a negative earnings surprise of 154.55%. Moreover, the company has lagged the Zacks Consensus Estimate in three of the trailing four quarters, with an average earnings miss of 72.84%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Liberty Media’s ownership of around 53% stake in Sirius XM Holdings Inc. SIRI – a leading satellite radio service provider in the U.S. – should generate significant financial synergies for the company, going ahead. Also, Liberty Media is poised to witness subscriber growth and additional revenues in the to-be-reported quarter owing to its 27% stake in Live Nation Entertainment, the largest concert promoter and ticketing company in the U.S.
The company is steadily restructuring its business model with an aim to control several subscription-based businesses. However, Liberty Media's high dependence on subscription-based services which are vulnerable to economic fluctuations might hamper profitability in the to-be-reported quarter. Moreover, stiff competition from pay-TV operators may weigh on the second quarter’s performance further.
Earnings Whispers
Our proven model does not conclusively show that Liberty Media is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and 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: Liberty Media has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 23 cents.
Zacks Rank: Liberty Media has a Zacks Rank #5 (Strong Sell). Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may consider instead, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Ashford Hospitality Trust, Inc. AHT, which has an earnings ESP of +8.70% and a Zacks Rank #1.
The Walt Disney Company DIS, which has an earnings ESP of +2.16% and a Zacks Rank #3.
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