Time Warner Inc.
), a media and entertainment company, to beat expectations when it
reports second-quarter 2014 results on Aug 6. In the last quarter,
it posted a positive surprise of 3.4%.
Why a Likely Positive Surprise?
Our proven model shows that Time Warner Inc. is likely to beat
earnings estimate this quarter. A stock needs to have both a
and a Zacks Rank #1 or 2 or 3 for this to happen. Time Warner has
the right combination of two key components.
Time Warner currently has an Earnings ESP of +1.19%. This is
because the Most Accurate estimate stands at 85 cents, while the
Zacks Consensus Estimate is pegged at 84 cents.
The company 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 Time Warner's Zacks Rank #3 and +1.19%
Earnings ESP makes us confident of earnings beat this release.
What is Driving the Better-than-Expected
We believe Time Warner's initiatives such as foray into new
markets, divestment activities and digital endeavors augur well for
its operating performance in the quarter to be reported. Moreover,
the company's investments in programming, production and marketing,
as well as its focus on operating and capital efficiencies bode
well. Also, the company has been expanding its digital presence to
facilitate consumers with contents on more platforms and
In the last four quarters, Time Warner outperformed the Zacks
Consensus Estimate by an average of 7.3%.
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:
Chipotle Mexican Grill, Inc. (
) has an Earnings ESP of +0.79% and a Zacks Rank #1 (Strong
Abercrombie & Fitch Co. (
) has an Earnings ESP of +20.00% and a Zacks Rank #2 (Buy).
Macy's Inc. (
) has an Earnings ESP of +1.16% and a Zacks Rank #3.
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