Will Rogers Communications (RCI) Disappoint This Earnings Season? - Analyst Blog


Rogers Communications Inc. ( RCI ), a leading Canadian telecom and cable TV operator, is scheduled to report its fourth-quarter 2013 financial results before the opening bell on Feb 12, 2014.

In the last quarter, the company delivered a negative 2.13% earnings surprise. Let's see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Canadian regulatory authorities concluded that the Canadian wireless market lacks competition. The government asserted that having just three carriers on an average per market in Canada has stifled competition, thereby resulting in higher rates and lower penetration than many other countries. So, they are planning to bring new entrants, which could pose tough competition to the company in the coming days.

Rogers Communications entered into a 12-year broadcast and multimedia agreement with National Hockey League (NHL) for national rights to NHL games on all platforms and languages. The agreement will start from the 2014-2015 session and will continue up to the 2025-2026 session. Rogers Communications will pay approximately $4.96 billion to NHL throughout the term.

Earnings Whispers

Our proven model does not conclusively show that Rogers Communications is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate estimate stands at $0.65 while the Zacks Consensus Estimate is higher at $0.69. This leads to an ESP of -5.8% for Rogers Communications.

Zacks Rank: Rogers Communications' Zacks Rank #4 (Sell), also decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -5.8% combined with a Zacks Rank #4 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Cablevision Systems Corporation ( CVC ) has earnings ESP of +33.33% and carries a Zacks Rank #2 (Buy).

Sprint Corporation ( S ) has earnings ESP of +9.38% and carries a Zacks Rank #3 (Hold).

Charter Communications, Inc. ( CHTR ) has earnings ESP of +138.10% and carries a Zacks Rank #3.

CHARTER COMM-A (CHTR): Free Stock Analysis Report

CABLEVISION SYS (CVC): Free Stock Analysis Report

ROGERS COMM CLB (RCI): Free Stock Analysis Report

SPRINT CORP (S): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CHTR , CVC , RCI , S



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