Is Liberty Global (LBTYA) Poised to Beat Earnings Estimates? - Analyst Blog


Liberty Global Inc. ( LBTYA ) is set to release its second-quarter fiscal 2014 results before the opening bell on Aug 5, 2014.

In the last quarter, the company delivered a negative 185.71% earnings surprise. Let's see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Going  forward, we believe Liberty Global's revenues will continue to benefit from a triple-play offering of video, broadband, and telephone, as it signs up more bundled customers in Europe and Latin America.

However, recessionary pressure in the European regions coupled with intense competition in the pay-TV market may act as headwinds for the company, going forward. Also, low per capita income may stall people from spending more on exorbitant high-speed bundled communication and HD-DVR-based digital video services. Moreover, business integration risks persist as the company has recently acquired several companies either partially or fully.

Earnings Whispers 

Our proven model does not conclusively show that Liberty Global 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, #2 or #3 for this to happen. Unfortunately, this is not the case here as elaborated below. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at 13 cents. Hence, the ESP is 0.00%.

Zacks Rank: Liberty Global carries Zacks Rank #3 (Hold) which increases the predictive power of ESP. 

However, we caution investors against the stock going into the earnings announcement, as an ESP of 0.00% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

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

Windstream Holdings, Inc. ( WIN ) has an Earnings ESP of +12.50% and a Zacks Rank #2 (Buy).

Cablevision Systems Corporation ( CVC ) has an Earnings ESP of +33.33% and a Zacks Rank #3.

Dish Network Corp. ( DISH ) has an Earnings ESP of +15.39% and a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: LBTYA , DISH , CVC , WIN

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