DreamWorks Animation SKG Inc.
) is set to release its second-quarter 2014 results after the
market closes on Jul 29, 2014.
In the last quarter, the company delivered a 41.67% earnings
surprise. Let's see how things are shaping up for this
Factors to be Considered this Quarter
DreamWorks is diversifying its Feature film segment to mitigate
volatility in the business. The company has also decided to invest
in key growth areas in order to expand operations into TV, consumer
product, digital content and location-based entertainment.
However, DreamWorks' revenues are highly dependent on the
success of its movie business. Thus, with only one film "The
Penguins of Madagascar" left to be released this year, the
company's top line is likely to get affected considerably in the
Our proven model does not conclusively show that DreamWorks is
likely to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, #2 or #3 for this to happen. Unfortunately,
this is not the case here as elaborated below. Also, the Sell-rated
stocks (#4 and 5) should never be considered going into an earnings
The Most Accurate estimate is poised at a loss of 7 cents while the
Zacks Consensus Estimate is pegged at a breakeven. Hence, the ESP
DreamWorks' Zacks Rank #3 (Hold) increases the predictive power of
However, DreamWorks' Zacks Rank #3 when combined with 0.00% ESP
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.
The Walt Disney Company (
) has an Earnings ESP of +0.86% and a Zacks Rank #3.
Time Warner Inc. (
) has an Earnings ESP of +1.19% and a Zacks Rank #3.
Digital Cinema Destinations Corp. (
) has an Earnings ESP of +66.67% and a Zacks Rank #3.
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