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Lions Gate Entertainment (LGF): What's Up in Q1 Earnings?

Lions Gate Entertainment Corp.LGF - a producer and distributor of motion pictures for theatrical and straight-to-video releases - is expected to report first-quarter fiscal 2017 results on Aug 4, 2016, after the closing bell.

Last quarter, the company posted a positive earnings surprise of 750%. Notably, the company missed the Zacks Consensus Estimate in two of the last four quarters, with an average negative surprise of 19.9%. Let's see how things are shaping up for this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Lions Gate Entertainment is likely to beat 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. Lions Gate Entertainment has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 24 cents. The company carries a Zacks Rank #4 (Sell). Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors Influencing the Quarter

Decline in theatrical film slate performance is a cause of concern for the company. We note that weakness in theatrical film slate performance has hampered its performance in the past. The escalating cost of motion picture production and marketing in recent years may jeopardize Lions Gate's margins. Persistence of this trend might make the company more dependent on lower revenue generating options such as home video and television, which may not suffice to offset production costs.

For fiscal 2017, Lions Gate Entertainment expects adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the range of $200-$300 million. The company expects the third and fourth quarters to be the highest contributors to adjusted EBITDA for fiscal 2017, whereas contribution from the first quarter will be the lowest.

LIONS GATE ETMT Price and EPS Surprise

LIONS GATE ETMT Price and EPS Surprise | LIONS GATE ETMT Quote

Stocks That Warrant a Look

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

Eros International Plc EROS has an Earnings ESP of +7.14% and a Zacks Rank #3.

TiVo Inc. TIVO has an Earnings ESP of +15.39% and a Zacks Rank #3.

Time Warner Inc. TWX has an Earnings ESP of +0.87% and a Zacks Rank #3.

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TIME WARNER INC (TWX): Free Stock Analysis Report

TIVO INC (TIVO): Free Stock Analysis Report

LIONS GATE ETMT (LGF): Free Stock Analysis Report

EROS INTL PLC (EROS): Free Stock Analysis Report

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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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