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iQIYI (IQ) Set to Report Q3 Earnings: What's in the Cards?

iQIYIIQ is set to report third-quarter 2018 results on Oct 30. In the last reported quarter, the company's loss of 45 cents per share was significantly narrower than the Zacks Consensus Estimate of a loss of $2.30.

Moreover, revenues came in at $933 million, lagging the Zacks Consensus Estimate of $959 million. Total revenues surged 51% from the year-ago quarter to RMB 6.2 billion.

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $1.01 billion. Moreover, the consensus mark has been steady at a loss of 41 cents over the last seven days.

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

Factors to Watch Out For

iQIYI is expected to benefit from its content portfolio strength. Strong demand for company-produced drama series, original movies and variety shows is expected to drive top-line growth. The company released new season of its hit show The Rap of China and drama series Story of Yanxi Palace in July.

Reportedly, the 70-episode Story of Yanxi Palace was "the most watched online drama in China for 39 consecutive days this summer, being streamed an average of 300 million times a day, on its peak day receiving a record breaking more than 700 million views."

The company also licensed a number of its original dramas such as With You , Summer's Desire , My Huckleberry Friends , and the 200 Million Years Old Classmate to several TV stations across China. This is expected to not only boost revenues but also traffic on iQIYI's platform.

iQIYI, Inc. Sponsored ADR Price and EPS Surprise

iQIYI, Inc. Sponsored ADR Price and EPS Surprise | iQIYI, Inc. Sponsored ADR Quote

Additionally, the company's strategy of offering two tiers of accessibility - VIP members watched all episodes at once, while non-VIP's a few episodes per week - expanded the subscriber base. We expect the momentum to continue in the to-be-reported quarter, primarily owing to content strength.

Moreover, iQIYI's joint membership program with JD.com is expected to add subscribers.

Further, improving Return on Investment (ROI) of advertisers is expected to drive top-line growth. In the last reported quarter, online advertising revenues jumped 45% to RMB 2.6 billion.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

iQIYI has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Stocks to Consider

Here are a few companies you may want to consider as our model shows that these have the right combination of elements to post earnings beat in their upcoming releases:

Apple AAPL has an Earnings ESP of +1.35% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

AMETEK AME has a Zacks Rank #2 and an Earnings ESP of +0.71%.

Generac Holdings GNRC has a Zacks Rank #2 and an Earnings ESP of +3.19%.

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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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