Scripps Networks Interactive Inc.
(
SNI
) is scheduled to release its fourth quarter 2011 results on
Thursday, February 9, before the markets opens. The current Zacks
Consensus Estimate for the fourth quarter stands at 81 cents,
representing an annualized growth of 19.12%.
With respect to earnings surprises over the trailing four
quarters, Scripps Networks has surpassed the Zacks Consensus
Estimate in three of the last four quarters with an average
earnings surprise of 5.02%.
Third Quarter Recap
On November 3, 2011, Polycom reported its third quarter 2011
financial results. Quarterly consolidated revenue of $503.7 million
was up 7.9% year over year, but came in below the Zacks Consensus
Estimate of $510 million.
Quarterly GAAP net income from continuing operation was $98.6
million or 65 cents per share compared with a net income of $101.7
million or 61 cents per share in the prior-year quarter. The
third-quarter 2011 EPS of 65 cents was exactly in line with the
Zacks Consensus Estimate. Operating margin in the reported quarter
was 38.9% compared with 41.8% in the prior-year quarter.
Agreement of Estimate Revisions
In the last 30 days, out of the 16 analysts covering the stock,
one analyst increased the EPS estimate while one decreased the same
for the fourth quarter of 2011. However, for the first quarter of
fiscal 2012, out of the eight analysts, none raised the EPS
estimate but one analyst slashed the estimate over the last 30
days.
For fiscal 2011, in the last 30 days, out of the 12 analysts
covering the stock, one analyst increased the EPS estimate while
one moved in the opposite direction. Similarly, for fiscal 2012,
out of the 17 analysts covering the stock, four analysts raised the
estimates but none reduced the same for the given period.
Magnitude of Estimate Revisions
During the last 30 days, the current Zacks Consensus Estimates
for both the ongoing quarter and the first quarter of 2012 were in
line with the previous estimates of 81 cents and 70 cents,
respectively. Similarly, for fiscal 2011, the current Zacks
Consensus Estimate was at par with the previous estimate of $2.83.
However, for fiscal 2012, during the last 30 days, the current
Zacks Consensus Estimates was just a penny above the previous
estimate of $3.21.
Earning Surprises
The current Zacks Consensus Estimates for both the ongoing
quarter and the next quarter reflects an 8.64% and 0.00% upside
potential (essentially a proxy for future earning surprises),
respectively. Similarly, fiscal 2011 and 2012 holds a growth
potential of 3.18% and 0.62%, respectively.
Our Recommendation
Continuous growth in advertising and affiliate fee revenues
coupled with channel acquisitions and future share repurchase
authorizations will act as growth catalysts for the company going
forward. However, stiff competition from other media companies like
Discovery Communications Inc.
(
DISCA
) and
Crown Media Holdings, Inc.
(
CRWN
) coupled with overall weak advertising market may act as headwinds
for the company in the forthcoming quarters. We, thus, maintain our
long-term Neutral recommendation for Scripps Networks.
Currently, Scripps Networks has a Zacks #2 Rank, implying a
short-term Buy rating on the stock.
CROWN MEDIA HLD (
CRWN
): Free Stock Analysis Report
DISCOVERY COM-A (
DISCA
): Free Stock Analysis Report
SCRIPPS NETWRKS (
SNI
): Free Stock Analysis Report
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