Markets

Shaw Communications (SJR) Q4 Earnings: What's in Store?

Shaw Communications Inc, (SJR) is slated to release its fourth-quarter fiscal 2015 results before the market opens on Oct 22.

Last quarter, Shaw Communications had delivered a positive earnings surprise of 18.42%. Moreover, the company's earnings have surpassed the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 4.88%. Let's see how things are shaping up for this announcement.

Factors Likely to Influence this Quarter

In September, Shaw Communications sealed its previously declared acquisition of ViaWest Inc. for $1.2 billion. The takeover of this Colorado-based data-center provider will help Shaw Communications expand its data services and cloud capabilities business and boost its operations in the North American data center sector.

Moreover, the company continues to expand its Wi-Fi network across Western Canada and has even formed a pact with Winnipeg and Victoria municipalities to enhance coverage in those areas. Such expansion activities should duly boost fiscal fourth quarter results.

However, Shaw Communications is persistently losing video cable and video satellite customers on grounds of stiff competition. In addition, considerable debt, escalating capital expenditure and a deteriorating cash position are likely to act as headwinds, moving ahead.

Earnings Whispers

Our proven model does not conclusively show that Shaw Communications is likely to beat the Zacks Consensus Estimate 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.

Zacks ESP: Shaw Communicationshas an earnings ESP of +8.57%. This is because the Most Accurate estimate is 45 cents while the Zacks Consensus Estimate is pegged at 38 cents.

Zacks Rank: Shaw Communicationshas a Zacks Rank #4 (Sell). Note that stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

Comcast Corp. CMCSA has an earnings ESP of +1.25% and a Zacks Rank #3.

Frontier Communications FTR has an earnings ESP of +100.0% and a Zacks Rank #3.

T-Mobile US TMUS has an earnings ESP of +3.13% and a Zacks Rank #2.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SHAW COMMS-CL B (SJR): Free Stock Analysis Report

FRONTIER COMMUN (FTR): Free Stock Analysis Report

COMCAST CORP A (CMCSA): Free Stock Analysis Report

T-MOBILE US INC (TMUS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

SJR TMUS CMCSA

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More