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Media Stocks Q4 Earnings to Watch on Jan 26: CMCSA & RCI

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We are entering the heart of the Q4 earnings season, with more than 300 companies, including 105 S&P 500 members coming up with quarterly results this week.

Q4 Earnings So Far

The fourth-quarter earnings season is well underway with 63 S&P 500 participants (accounting for 19.2% of the index's total market capitalization) having reported results as of Friday, Jan 20, according to the latest Earnings Preview . Total earnings for these 63 index members are up 4.7% year over year, on 2.7% higher revenues, with 66.7% beating EPS estimates and 50.8% coming ahead of top-line expectations.

Moreover, the season has started on a strong note, courtesy of earnings beats from big names in the banking space like JPMorgan Chase & Co. JPM and Bank of America BAC .

On the whole, we anticipate the pace of growth to improve steadily this earnings season. In fact, our latest data projects that earnings for the S&P 500 companies are now on track to grow 4.8% from the year-ago period on 3.7% higher revenues. This is comparable to earnings growth of 3.8% in Q3, which was the first quarter of growth after five consecutive quarters of earnings contraction, on 2.3% higher revenues.

Media Sector Stocks at a Glance

As per the Zacks Industry categorization, the 'Media Sector' falls under the broader 'Consumer Discretionary' sector, one of the 16 Zacks sectors.

Our latest Earnings Preview article states that roughly 8.3% of the Consumer Discretionary stocks have reported results for this quarter, recording a 16.3% rise in earnings and a 10.4% upside in revenues on a year-over-year basis.

Moreover, we predict that earnings of the 'Consumer Discretionary' space are on track to be up 3.4% in the quarter on 13.2% higher revenues than last year.

The Media Sector further includes a subcategory - 'Cable TV' industry - which has some major stocks such as Shaw Communications Inc. SJR that already reported weak financial results for the first quarter of fiscal 2017 (ended Nov 30, 2016) on Jan 12. With the other cable companies lined up to report their results, it's too early to predict the performance of this corner this time around.

Media Stocks to Release Q4 Earnings on Jan 26

Let's have a look at how some of the major cable companies in the U.S. are poised ahead of their releases before market opens on Jan 26.

Comcast Corp.CMCSA , the leading cable multi-service operator (MSO) in the U.S., is slated to report fourth-quarter 2016 results on Jan 26, before the opening bell.

Last quarter, Comcast Corp.'s bottom line matched the Zacks Consensus Estimate. However, the company's earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 1.58%.

Comcast Corporation Price and EPS Surprise

Comcast Corporation Price and EPS Surprise | Comcast Corporation Quote

Our proven model does not conclusively show that Comcast is likely to beat on earnings in the to-be-reported quarter. This is because inspite of carrying a Zacks Rank #3 (Hold), Comcast currently has an Earnings ESP of -1.15%, with the Most Accurate estimate being 86 cents and the Zacks Consensus Estimate pegged at 87 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Despite a favorable rank, the company's negative Earnings ESP leaves surprise prediction inconclusive. (Read more: What's in Store for Comcast this Earnings Season? )

Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. You can see the complete list of today's Zacks #1 Rank stocks here.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Rogers Communications Inc.RCI , the largest integrated telecom operator in Canada, is slated to report fourth-quarter 2016 results, before the opening bell on Jan 26.

Last quarter, Rogers Communications posted a negative earnings surprise of 10.45%. Moreover, the company's earnings lagged the Zacks Consensus Estimate in all the previous four quarters, with an average negative surprise of 8.52%.

Rogers Communication, Inc. Price and EPS Surprise

Rogers Communication, Inc. Price and EPS Surprise | Rogers Communication, Inc. Quote

Our proven model does not conclusively show that Rogers Communications is likely to beat on earnings this quarter.This is because the company currently has an Earnings ESP of 0.00%, where both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 54 cents. Weakening the chance of an earnings beat further is the company's Zacks Rank #4. (Read more: What Awaits Rogers Communications in Q4 Earnings? )

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J P Morgan Chase & Co (JPM): Free Stock Analysis Report

Bank of America Corporation (BAC): Free Stock Analysis Report

Shaw Communications Inc. (SJR): Free Stock Analysis Report

Rogers Communication, Inc. (RCI): Free Stock Analysis Report

Comcast Corporation (CMCSA): 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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