Leading cable multi service operator (MSO) in the U.S.,
), is slated to report its second-quarter 2014 results on July 22,
before the opening bell.
In the previous quarter, Comcast reported a positive earnings
surprise of 6.25%. In-fact, the company has outpaced the Zacks
Consensus Estimate in three of the last four quarters with an
average positive earnings beat of 3.7%. Let's see how things are
shaping up for this announcement.
Factors at Play
After a gap of 26 quarters, Comcast has finally gained a healthy
number of video subscribers over the last two quarters. Subscriber
gain was primarily driven by the launch of innovative services,
enhanced customers support and improved customer retention
Meanwhile, the company's Cable business continues to perform
well with the NBC Universal segment also witnessing gradual
improvement. In the first quarter of 2014, the company generated
$6.87 billion in revenues at the NBC Universal segment, primarily
driven by the tremendous success of the Sochi 2014 Olympics from
which the company generated nearly $1.1 billion in revenues.
The company also recently aired the world's biggest sporting
event - the 2014 FIFA World Cup - on Comcast's Xfinity TV
microsites and Xfinity TV Go app. We believe Comcast's addition of
such customer-oriented shows and features will not only enhance the
company's existing subscriber base but will also help reduce churn
rate, going forward.
However, the U.S. pay-TV market is reaching a saturation level.
Moreover, stiff competition from large carriers and other low-cost
video streaming companies coupled with mounting programming costs
and debt levels may act as headwinds for the company in the near
Our proven model does not conclusively show that Comcast is
likely to beat earnings this quarter. That is because a stock needs
to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here, as you will see below.
Zero Zacks ESP:
This is because both the Most Accurate estimate and the Zacks
Consensus Estimate are poised at 73 cents. This leads to an ESP of
0.00% for Comcast.
Comcast carries a Zacks Rank #3 (Hold) which when combined with a
0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies for investors to consider, that,
according to our model have the right combination of elements to
post an earnings beat this quarter:
Charter Communications, Inc.
), with earnings ESP of +387.5% and a Zacks Rank #1 (Strong
Cablevision Systems Corp.
), with earnings ESP of +20.0% and a Zacks Rank #2 (Buy).
Dish Network Corp.
), with earnings ESP of +15.4% and a Zacks Rank #3 (Hold).
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COMCAST CORP A (CMCSA): Free Stock Analysis
CHARTER COMM-A (CHTR): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
CABLEVISION SYS (CVC): Free Stock Analysis
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