Factors Setting the Tone for SeaWorld (SEAS) Q2 Earnings
SeaWorld Entertainment, Inc.SEAS is scheduled to report second-quarter 2018 numbers on Aug 6, before the opening bell. In the last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate by 30.3%. Notably, in two out of the trailing four quarters, the company's earnings beat the consensus mark.
The question lingering in investors' minds now is whether SeaWorld will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for earnings in the second quarter is pegged at 27 cents, lower than $1.09 reported in the prior-year quarter. Meanwhile, the Zacks Consensus Estimate pegs revenues of nearly $368.1 million in the quarter under review, down 1.5% from the prior-year quarter.
Factors at Play
The company's top line is likely to have faced pressure in the to-be-reported quarter because of lower admission per capita. Despite an increase in per capita spending, the company has been facing lower admission per capita due to park attendance mix. Moreover, unfavorable weather conditions also remain a potential threat to SeaWorld's top-line momentum. However, SeaWorld is increasingly focusing on its marketing strategy to highlight brand attributes and additions. All of these are expected to boost attendance in the quarter under review. Further, in an effort to drive attendance, the company is introducing new rides at most of its parks.
Coming to profit generation, the company has been undertaking sincere efforts to control costs without denting efficiency and improve financial standing through debt refinancing. The company expects to achieve net cost savings of $40 million by the end of 2018. However, we also note that the company has been shouldering increased expenses related to pre-tax and legal settlement accrual. This might have dented earnings in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model shows that SeaWorld is likely to beat earnings estimates 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 3 (Hold) - for this to happen. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
SeaWorld has an Earnings ESP of +20.99% and a Zacks Rank #3, which increases the likelihood of a beat.
SeaWorld Entertainment, Inc. Price and EPS Surprise
Other Stocks to Consider
Here are some other stocks from the Consumer Discretionary sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Clarus CLAR has an Earnings ESP of +100.00% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Aug 6.
Norwegian Cruise NCLH has an Earnings ESP of +0.36% and a Zacks Rank #3. The company is slated to report quarterly numbers on Aug 9.
Madison Square Garden MSG has an Earnings ESP of +11.47% and a Zacks Rank #3. The company is expected to report quarterly numbers on Aug 16.
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