Is ViaSat (VSAT) Poised to Surprise Q1 Earnings Estimates? - Analyst Blog

Satellite communications company ViaSat Inc. ( VSAT ), is set to release its first-quarter fiscal 2015 financial numbers after the closing bell on Aug 12, 2014.

In the last-reported quarter, the company had delivered a negative earnings surprise of 130.00%. Let's see how things are shaping up for this announcement.

Factors to be Considered this Quarter

In June, the company acquired privately held Wi-Fi technology firm NetNearU Corp. in a bid to deliver high-speed satellite and Internet services. This acquisition is expected to drive revenues higher in the coming quarters.

In the previous quarter, ViaSat's top-line performance was the weakest in two years. Revenues increased 35% in the Satellite Services segment but slid 3% in its largest segment - Government Systems. We do not expect the top line to recover much this quarter. Moreover, reduced government spending may hamper the company's results in the coming quarters.

Earnings Whispers?

Our proven model does not conclusively show that ViaSat is likely to beat earnings 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. Unfortunately, that is not the case here as elaborated below.

Zero Zacks ESP: This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 4 cents. This leads to an ESP of 0.00% for ViaSat.

Zacks Rank: ViaSat has a Zacks Rank #3 which, when combined with ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are some other companies to consider from among other sectors, as our model shows they have the right combination of elements to post an earnings beat this quarter.

La Jolla Pharmaceutical Co. ( LJPC ) with Earnings ESP of +17.57% and a Zacks Rank #2.

Crescent Point Energy Corp. ( CPG ) with Earnings ESP of +28.21% and a Zacks Rank #2.

J. C. Penney Company, Inc. ( JCP ) with Earnings ESP of +14.14% and a Zacks Rank #2.

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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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