Scripps Network Interactive Inc.
), a pure-play lifestyle cable network company, to beat
expectations when it reports its first-quarter 2013 results
before the market opens on May 2, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Scripps Network is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is +1.35%. This is a
meaningful and leading indicator of a likely positive earnings
: Scripps Networks currently has a Zacks Rank #3 (Hold). Note
that the stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) and 3
(Hold) have a significantly higher chance of beating
The combination of Scripps Network's Zacks Rank #3 (Hold) and
+1.35% ESP makes us confident of a positive earnings beat on May
What is Driving the Better-Than-Expected
We expect Scripps Network to deliver positive results based on
solid growth in advertising and affiliate-fee revenues from its
flagship Lifestyle Media businesses. Recently, HGTV - a
subsidiary of Scripps - formed a multi-year partnership with
interactive channel retailer, HSN Inc. This will bring HGTV HOME
Outdoor Living show on HSN.
Additionally, Scripps entered into a content licensing deal
with Amazon.Com, which will allow the latter's subscription-based
video streaming subscribers to view past episodes of Scripps
Network's popular TV channels. This deal will allow Scripps to
earn additional revenues from its past shows. However, the
company continues to face stiff competition in both its Lifestyle
Media and Interactive Services businesses from alternative
providers of similar services.
Other Stocks to Consider
Other companies you may consider on the basis of our model,
which have the right combination of elements to post an earnings
beat this quarter are as follows:
) has an Earnings ESP of +4.08% and holds a Zacks Rank #3
) currently has an Earnings ESP of +3.77% and holds a Zacks Rank
Dish Network Corporation
) has an Earnings ESP of +1.89% and carries a Zacks Rank #3
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