Will Scripps (SSP) Miss on Q2 Earnings this Season? - Analyst Blog

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The E. W. Scripps Company ( SSP ), a diversified media company, is slated to report its second-quarter fiscal 2014 earnings on Aug 8, before the opening bell. In the previous quarter, Scripps recorded a positive earnings surprise of 92.3%. Let's see how things are shaping up for this announcement.       

Factors Influencing this Quarter

In the previous quarter, Scripps' revenues improved on the back of robust local advertising revenue along with an anticipated rise in retransmission revenue. Also, the company's loss from operations narrowed year over year. Going forward, the company is likely to benefit from the recent merger of its broadcast operations and newspapers with Journal Communications (JRN). This merger is anticipated to drive Scripps' television margins, revenues and help it maintain its solid financials. However, we prefer being on sidelines as the company is witnessing rising costs allocated towards supporting its digital initiatives.

Earnings Whispers

Our proven model does not conclusively show that Scripps is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below:

Zacks ESP : Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at -33.33%. This is because the Most Accurate estimate of 8 cents per share is below the Zacks Consensus Estimate of 12 cents.

Zacks Rank : Scripps carries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

GameStop Corp. ( GME ), Earnings ESP of +26.32% and a Zacks Rank #3 (Hold).

Abercrombie & Fitch Co. ( ANF ), Earnings ESP of +20.00% and a Zacks Rank #3.

Macy's, Inc. ( M ), Earnings ESP of +1.16% and a Zacks Rank #3.


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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: JRN , M , ANF , GME , SSP

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