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Can Viacom (VIAB) Surprise Estimates in Q1 Earnings?

Viacom Inc.VIAB is set to release first-quarter 2016 results before the opening bell on Feb 9.

In the last quarter, the company posted a 1.32% earnings surprise. Let's see how things are shaping up for this announcement.

Factors at Play

We believe that the lack of hit movie releases is likely to hurt the company's Film division. Furthermore, a volatile economic scenario may impact the company's advertisement revenues. Moreover, an enhanced geographic presence will increase the foreign currency exchange rate risks for Viacom. To add to the woes, mounting programming expenses may further impact margins moving ahead.

Earnings Whispers

Our proven model does not conclusively show that Viacom 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 #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are both poised at $1.17. Hence, the ESP is 0.00%.

Zacks Rank: Viacom carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

Please note that Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Stocks to Consider

Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

The Walt Disney Company DIS has an earnings ESP of +2.08% and a Zacks Rank #2.

Grupo Televisa, S.A.B. TV has an earnings ESP of +13.89% and a Zacks Rank #1.

Discovery Communications, Inc. DISCA has an earnings ESP of +8.7% and a Zacks Rank #3.

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DISNEY WALT (DIS): Free Stock Analysis Report

GRUPO TELEVISA (TV): Free Stock Analysis Report

DISCOVERY COM-A (DISCA): Free Stock Analysis Report

VIACOM INC-B (VIAB): Free Stock Analysis Report

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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 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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