What's in the Cards for Lions Gate (LGF.A) in Q3 Earnings?
Lions Gate Entertainment Corp.LGF.A , producer and distributor of motion pictures for theatrical and straight-to-video release, is scheduled to report third-quarter fiscal 2017 results on Feb 8, 2016, after the closing bell.
Last quarter, the company posted a negative earnings surprise of 45.8%. Notably, the company has surpassed the Zacks Consensus Estimate in two of the last four quarters, with an average earnings beat of 205.1%. Let's see how things are shaping up for this announcement.
Lions Gate Entertainment Corporation Price, Consensus and EPS Surprise
Factors Influencing the Quarter
Lions Gate's Television segment looks robust. In second-quarter fiscal 2017, Television Production revenues jumped 43% to $175.1 million, largely on the strength of domestic revenues that soared 76%.
The company's movie businesses have done reasonably well in third-quarter fiscal 2017. La La Land, which was made on a budget of nearly $30 million, has so far managed to garner approximately $270 million. Moreover, Hacksaw Ridge has collected more than $160 million at the box office.
However, the escalating cost of motion picture production and marketing in recent years may jeopardize Lions Gate's margins. The persistence of this trend will leave no other option for the company but to depend more on lower revenue generating alternatives such as home video and television, which may not suffice to offset the cost of production. Moreover, intensifying currency headwinds might weigh on its performance.
Our proven model does not conclusively show that Lions Gate Entertainment 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. This is not the case here, as you will see below:
Zacks ESP: ESP for Lions Gate Entertainment is -10.00%. This is because the Most Accurate estimate stands at 9 cents, while the Zacks Consensus Estimate is pegged higher at 10 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank: Lions Gate Entertainment carries a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company's ESP of -10.00% makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Charter Communications, Inc. CHTR has an Earnings ESP of +1.89% and also carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .
Time Warner Inc. TWX has an Earnings ESP of +1.68% and carries a Zacks Rank #3.
Viacom, Inc. VIAB has an Earnings ESP of +1.21% and currently has a Zacks Rank #3.
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