The fourth-quarter 2016 earnings season has kick started and the investor community is all busy matching up the estimated earnings of companies with their actual outcomes. The ongoing scenario seems to be on track toward attaining its best performance in eight quarters. Further, we remain hopeful of earnings growth (on a year-over-year basis) for the second consecutive quarter after five straight quarters of earnings declines.
Per the Earnings Outlook
as of Jan 30, 2017, earnings for the total S&P 500 companies will improve 5.3% from the year-ago period, with total revenue rising to 4%. However, excluding the Finance sector, earnings for the total S&P 500 companies will increase 1% from the year-ago period, along with revenue growth of 4.2%.
As per the report, out of the 171 S&P 500 companies that have come up with their quarterly numbers, approximately 64.3% posted positive earnings surprises, while 54.4% beat the top-line expectations. Total earnings for these index members were up 6% from the year-ago quarter, while revenues increased 3.1%.
The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, five are expected to witness an earnings decline in the fourth quarter as per Earnings Preview
report of Jan 27, 2017. Of these, Auto, Transportation, Oil/Energy and Conglomerates are likely to be a major drag.
Total earnings for the Consumer Staples sector are estimated to rise 9.5%, whereas revenues are projected to improve 4.1%. Publishing forms a part of the Consumer Staples sector. So, let's see what awaits the following publishing stocks that are queued up for earnings releases on Feb 2. The New York Times Company NYT
, a diversified media conglomerate has outperformed the Zacks Consensus Estimate by an average of 12.6% in the trailing four quarters.
Our proven model does not conclusively show that the company is likely to beat earnings estimates in fourth-quarter 2016. 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. You may uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter
New York Times Company (The) Price, Consensus and EPS Surprise
New York Times Company (The) Price, Consensus and EPS Surprise | New York Times Company (The) Quote
The New York Times Company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 23 cents. The company's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
You can see the complete list of today's Zacks #1 Rank stocks here .
The New York Times Company is diversifying its business, adding new revenue streams, strengthening its balance sheet along with restructuring its portfolio. It has offloaded assets in order to re-focus on its core newspapers and pay more attention to its online activities. However, advertising revenue remains an area of concern for the company. Further, management expects total advertising revenue in the fourth quarter to decline at a rate equivalent to that of the third quarter. (Read more: NY Times Q4 Earnings: What Factors Are at Play? )
Finally, let's see what's in store for Lee Enterprises, Incorporated LEE , a premier publisher of local news, information and advertising in primarily midsize markets. In fourth-quarter fiscal 2016, the company has posted a positive earnings surprise of 100%.
Lee Enterprises, Incorporated Price, Consensus and EPS Surprise
Lee Enterprises, Incorporated Price, Consensus and EPS Surprise | Lee Enterprises, Incorporated Quote
Our proven model does not conclusively show that Lee Enterprises is likely to beat earnings estimates in first-quarter fiscal 2017. It has an Earnings ESP of 0.00%, with both the Most Accurate estimate and the Zacks Consensus Estimate pegged at 15 cents. Moreover, it carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report New York Times Company (The) (NYT): Free Stock Analysis Report Lee Enterprises, Incorporated (LEE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research