), the largest satellite TV provider in the U.S., to beat
expectations when it reports second-quarter 2013 results on Aug
1, 2013, before the market opens.
Why a Likely Positive Surprise?
Our proven model shows that DIRECTV is likely to beat earnings
because it has the right combination of two key ingredients.
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, stands at +0.78%. This
is very meaningful and a leading indicator of a likely positive
Zacks #3 Rank (Hold):
DIRECTV currently has a Zacks Rank #3. Note that stocks with
Zacks Ranks of #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a
significantly higher chance of beating earnings.
The combination of DIRECTV's Zacks Rank #3 (Hold) and +0.78%
ESP makes us very confident of a positive earnings beat on Aug 1,
What is Driving the Better-Than-Expected
DTV is shifting its focus from customer acquisition to
customer retention, which will not only boost ARPU but will also
reduce churn rate. With a higher-quality subscriber base, DIRECTV
has raised programming package and HD and DVR equipment service
and lease fees in the U.S., This will drive ARPU, which will
result in margin expansion.
However, a maturing pay-TV market in the U.S. coupled with
tough competition from cable MSOs (multi service operator) remain
the biggest challenge for DIRECTV. Moreover, large telecom
carriers are offering fibre-based TV and other high-speed
broadband services, which is impacting DIRECTV's market share.
Additionally, slow economic growth and a weak currency in Brazil
will likely hamper DIRECTV's growth in the Latin American
Other Stocks to Consider
Other companies you may want to consider on the basis of our
model which shows that they have the right combination of
elements to post an earnings beat this quarter are as
) has an Earnings ESP of +1.39% and carries a Zacks Rank #2
Cablevision Systems Corp.
) currently has an Earnings ESP of +40.00% and holds a Zacks Rank
Time Warner Cable Inc.
) has an Earnings ESP of +1.21% and carries a Zacks Rank #3
CBS CORP (CBS): Free Stock Analysis Report
CABLEVISION SYS (CVC): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis
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