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Gannett (GCI) Q4 Earnings in Focus: Can the Stock Surprise?

Diversified media conglomerate, Gannett Co., Inc.GCI is slated to report fourth-quarter 2016 results on Feb 9. In the preceding quarter, the company witnessed a negative earnings surprise of 64.7%. The question lingering in investors' minds is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported.

Which Way are Estimates Treading?

Let's look at earnings estimate revisions in order to get a clear picture of what analysts are thinking about the company right before earnings release. The current Zacks Consensus Estimate for the quarter under review has been stable in the past 30 days, and is currently pegged at 37 cents, down roughly 30% from the year-ago quarter. Analysts polled by Zacks expect revenues of $847.2 million, up over 14% from the prior-year period.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Gannett is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Gannett has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 37 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.

Factors Influencing this Quarter

Gannett is realigning cost structure and streamlining operations to increase efficiencies and safeguard earnings and cash flows from dwindling print advertising revenue. Management has commenced incremental cost containing actions aggregating $30 million annually. Further, the company remains focused on improving its digital business with an aim to lower dependency on soft print media business and traditional advertising. Print advertising revenue declined 14.8%, while digital advertising revenue advanced 6.2% in the third quarter.

Stocks Poised to Beat Earnings Estimates

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

Time Warner Inc. TWX has an Earnings ESP of +1.68% and carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Marriott International, Inc. MAR currently has an Earnings ESP of +1.21% and a Zacks Rank #2.

Viacom, Inc. VIAB has an Earnings ESP of +2.41% and currently has a Zacks Rank #3.

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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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