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Cinemark Holdings (CNK) Q4 Earnings: What's in the Cards?

Cinemark Holdings Inc.CNK is slated to report fourth-quarter 2016 results on Feb 23, before the opening bell.

Over the past three months, shares of Cinemark Holdings returned 2.29% compared with the Zacks categorized Leisure and Recreation Services industry's growth of 8.64%.

Last quarter, the company delivered a positive earnings surprise of 1.82%. Moreover, the company's earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 4.29%.

Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Cinemark Holdingsis likely to beat on earnings because it has the perfect combination of the two key ingredients this time around.

Zacks ESP:Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +2.38%. This is because the Most Accurate estimate stands at 43 cents whereas the Zacks Consensus Estimate is pegged lower at 42 cents. A favorable Zacks ESP serves as a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Cinemark Holdings currently has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Cinemark Holdings' favorable Zacks Rank #3 and positive Earnings ESP makes us reasonably confident of a positive earnings beat.

What is Driving the Better-than-Expected Earnings?

Cinemark Holdings is a leading motion picture exhibition company which operated operated 522 theatres with 5,865 screens in 15 Latin-American countries, as of Sep 30, 2016.

Of late, Cinemark Holdings has been opening and renovating theatres with state-of-the-art amenities. It recently opened a 14-screen theatre in Sacramento, CA and a new 8-screen theatre in West Dundee, IL. Both the theatres will feature the company's Luxury Lounger electric recliners in all auditoriums, large wall-to-wall screens, enhanced sound systems and digital presentation in all auditoriums along with Cinemark XD auditorium and Cinema Café.

Cinemark Holdings also announced plans to renovate and upgrade its Cinemark 18 and XD Theatre by adding electric reclining seats to all auditoriums and a lobby bar serving beer and wine.

We are impressed with Cinemark Holdings' efforts to reward its stockholders with a cash dividend of 27 cents per share of common stock. The dividend was paid on Dec 16, 2016 to stockholders of record on Dec 2, 2016.

However, Cinemark continues to face threats from alternative movie streaming services such as Netflix, Inc. NFLX , and Time Warner Inc.'s HBO Now and Hulu. While theater chains remain the preferred choice for film studios, the recent trend of movie watchers opting for streaming services are making film studios seek better terms in box-office revenues with large-screen theater companies, which might hamper profitability.

Cinemark Holdings Inc Price and EPS Surprise

Cinemark Holdings Inc Price and EPS Surprise | Cinemark Holdings Inc Quote

Key Picks

Here are some companies in the Zacks-categorized broader 'Consumer Discretionary' sector that have the right combination of elements to post an earnings beat this quarter.

Pinnacle Entertainment, Inc. PNK is expected to release fourth-quarter earnings on Feb 22, 2017. The company has an Earnings ESP of +57.14% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Pinnacle Entertainment's earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters.

Tribune Media Company TRCO is expected to release fourth-quarter earnings on Mar 1, 2017. The company has an Earnings ESP of +4.44% and a Zacks Rank #3. Tribune Media's earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters.

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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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