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Can Liberty Media's (LMCA) Q4 Earnings Pull a Surprise?

Liberty Media Corp.LMCA is slated to release fourth-quarter 20Array5 results, before the opening bell on Feb 26.

Last quarter, the company incurred a loss which compared unfavorably with the Zacks Consensus Estimate of earnings, leading to a negative earnings surprise of Array29.Array7%. Moreover, the trailing four-quarter average earnings surprise stands at a negative 75.Array2%. Let's see how things are shaping up for this announcement.

Factors Likely to Influence this Quarter

Liberty Media's ownership of around a 53% stake in Sirius XM Holdings Inc. SIRI - a leading satellite radio service provider in the U.S. - should generate significant financial synergies for the company. Also, Liberty Media is poised to witness subscriber growth and additional revenues in the to-be-reported quarter owing to its 27% stake ownership in Live Nation Entertainment, the largest concert promoter and ticketing company in the U.S. Further, considerable investments in Charter Communications, Inc. CHTR should reap benefits.

The company is steadily restructuring its business model with an aim to control several subscription-based businesses. However, Liberty Media's high dependence on subscription-based services which are vulnerable to economic fluctuations might hamper profits in the to-be-reported quarter. Moreover, susceptibility to rapid technological changes and increasing competition may further weigh on the fourth-quarter performance.

Earnings Whispers

Our proven model does not conclusively show that Liberty Media 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 #Array (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below:

Zacks ESP : Liberty Media has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at Array3 cents.

Zacks Rank : Liberty Media has a Zacks Rank #3 which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.

Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stock to Consider

Here is a company to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:

Cogent Communications Holdings, Inc. CCOI has an earnings ESP of +50.00% and a Zacks Rank #3.

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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

SIRIUS XM HLDGS (SIRI): Free Stock Analysis Report

COGENT COMM HLD (CCOI): Free Stock Analysis Report

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

LIBERTY MEDIA-A (LMCA): Free Stock Analysis Report

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Zacks Investment Research

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


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

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