Gannett Co., Inc.
), a diversified media conglomerate, to beat expectations when it
reports second-quarter 2014 results on Jul 22. In the last quarter,
it posted a positive surprise of 2.17%.
Why a Likely Positive Surprise?
Our proven model shows that Gannett is likely to beat earnings
because it has the right combination of two key
Gannett currently has an
of +3.18%. This is because the Most Accurate estimate stands at 65
cents, while the Zacks Consensus Estimate is pegged at 63
Gannett carries a Zacks Rank #3 (Hold). Note that stocks with a
Zacks Ranks of #1, #2 and #3 have a significantly higher chance of
beating earnings estimates. The Sell-rated stocks (Rank #4 and 5)
should never be considered going into an earnings announcement.
The combination of Gannett's Zacks Rank #3 (Hold) and +3.18% ESP
makes us confident of an earnings beat this release.
What is Driving the Better-than-Expected Earnings?
Gannett is repositioning itself to broaden its business model by
adding new revenue streams. It is also streamlining its cost
structure, strengthening its balance sheet and restructuring its
portfolio. We believe that the company's focus on a
subscription-based model and Geodigital services would make it less
dependable on traditional advertising revenues. The company is also
solidifying its foothold in the rapidly growing broadcast media
In the last four quarters, Gannett outperformed the Zacks
Consensus Estimate by an average of 1.73%.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our
model shows that these have the right combination of elements:
Big Lots Inc.
has an Earnings ESP of +3.33% and a Zacks Rank #2 (Buy).
) has an Earnings ESP of +1.89% and a Zacks Rank #2.
Dollar General Corporation
) has an Earnings ESP of +1.21% and a Zacks Rank #3.
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