The Walt Disney Company
), is set to report its third-quarter fiscal 2014 results on Aug 5,
2014. Last quarter, it posted a positive earnings surprise of
14.4%. Let us see how things are developing for this
Growth Factors this Quarter
Rise in programming costs due to higher sports rights deals (World
Cup, NLF, Major League Basketball and college football rights and
SEC Network Launch) are the near-term headwinds that are likely to
prove a drag on Disney's quarterly performance. Moreover, the
unfavorable impact from currency fluctuations is an added concern.
However, the impact of Easter that fell in the third quarter should
boost the performance of Parks and Resorts segment. Also, the
roaring success of
should continue to enhance profitability at both Studio
Entertainment and Consumer Products segments.
In the latest development, Disney has signed a multi-year
distribution agreement with The National Cable Television
Cooperative (NCTC) to relay best quality sports, news and
entertainment content to the customers of NCTC members across
Television, smartphones, computers, gaming consoles, tablets and
other connected devices.
Our proven model does not conclusively project Disney as likely to
beat earnings this quarter. This is because a stock needs to have
both a positive
and Zacks Rank #1 #2 or #3 for this to happen. This is not the case
here as you will see below.
ESP for Disney is -0.86%. This is because the Most Accurate
estimate stands at $1.16 per share whereas the Zacks Consensus
Estimate stands at $1.17.
Disney's Zacks Rank #3 (Hold) increases the predictive power of
ESP. However, we need to have a positive ESP to be confident of an
earnings surprise. We caution against stocks with a Zacks Rank #4
and #5 (Sell-rated stocks) going into an earnings announcement,
especially when the company is witnessing negative estimate
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows these to have the right combination of elements to post an
The Andersons, Inc. (
) with an Earnings ESP of +6.09% holds a Zacks Rank #2 (Buy).
Archer Daniels Midland Company (
) has an Earnings ESP of +2.67% and a Zacks Rank #3.
Time Warner Inc. (
) has an Earnings ESP of +1.19% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ARCHER DANIELS (ADM): Free Stock Analysis
ANDERSONS INC (ANDE): Free Stock Analysis
TIME WARNER INC (TWX): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
To read this article on Zacks.com click here.