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Viacom: Earnings Preview - Analyst Blog
In the last quarter, it delivered a positive earnings surprise
of 3.42%. Out of the last four quarters, the company thrice
reported positive earnings surprises. Let's see how things are
shaping up prior to the announcement.
Factors to Consider this Quarter
Viacom is well positioned for long-term growth as it continues to benefit from its predominately cable networks-based business model, strong affiliate fee revenue growth, strong share repurchase plan, multi-platform content, and is one of the fastest growing traditional ad media. Moreover, settlement of fee related issues with DIRECTV will further bolster its affiliated revenue growth.
However, sluggish economic growth and lesser number of popular movies released during this quarter may pull down top-line growth while moving ahead.
The Zacks Consensus Estimate for the first quarter has moved up by a penny to 92 cents per share over the last 7 days as the tendency for an upward estimate revision was more obvious mainly buoyed by strong political ad revenue growth.
Our proven model does not conclusively show that Viacomis likely to beat the Zacks Consensus Estimate in the fourth quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) (Read: Zacks Earnings ESP: A Better Method ) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2 (Buy) or Zacks Rank #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 90 cents while the Zacks Consensus is higher at 91 cents. This results in a difference of -1.1%.
Zacks Rank #3 (Hold): Viacom's Zacks Rank of 3, however, increases the predictive power of ESP. That said we also need to have a positive ESP to be confident for an earnings surprise call.
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 this quarter:
Comcast Corporation ( CMCSA ) has Earnings ESP of a +1.89% and carries a Zacks Rank #3 (Hold). It is scheduled to report its fourth quarter results on Feb 13.
Cablevision Systems Corporation ( CVC ) is scheduled to release its fourth quarter results on Feb 12. It has Earnings ESP of +10.00% and holds a Zacks Rank #3 (Hold).
Liberty Global Inc. ( LBTYA ) has Earnings ESP of + 86.67% and carries a Zacks Rank #3 (Hold). It is yet to release its fourth quarter results.
COMCAST CORP A (CMCSA): Free Stock Analysis Report
CABLEVISION SYS (CVC): Free Stock Analysis Report
LIBERTY GLBL-A (LBTYA): Free Stock Analysis Report
VIACOM INC-B (VIAB): Free Stock Analysis Report
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