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Will Liberty Global (LBTYA) Disappoint this Earnings Season?

LibertyGlobal plc.LBTYA , a leading cable TV operator in Europe and Latin America, is scheduled to report fourth-quarter 2016 results on Feb 16, before market open.

Over the past three months, shares of Liberty Global witnessed a growth of growth of 15.33% while the Zacks categorized Cable TV industry gained 14.30%.

Last quarter, the company posted a negative earnings surprise of 1700.00%. Moreover, the company's earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 835.56%.

Let's see how things are shaping up for this announcement.

Factors Likely to Influence this Quarter

We appreciate Liberty Global's merger and acquisition plans as part of its business expansion strategies, and we look forward to seeing many more such deals. The launch of DOCSIS 3.1 network services, the 50:50 joint venture with Vodafone Group Plc. VOD in the Netherlands, the acquisition of UTV Ireland TV stations from ITV, and the takeover of Cable & Wireless are expected to drive Liberty Global's earnings in the to-be-reported quarter.

In order to expand its cable business, Liberty Global's agreement to acquire the cable business of Multimedia Polska S.A. and the long-term agreement with Netflix Inc. NFLX - which allowed the latter to offer its content on the former's cable network -bode well.

Nevertheless, Liberty Global's predominant operation in Europe is a major concern because of the prevalence of recessionary pressure, debt crisis and low per capita income in several European countries. Additionally, the markets for video, broadband, fixed-line telephony and mobile services are highly competitive and fast evolving with technological advancements and innovation. Hence, to keep pace with changing dynamics, the company has to bear the related expenses of launching the latest technologies. Further, foreign exchange rate risks and integration risks are other major dampeners.

Earnings Whispers

Our proven model does not conclusively show that Liberty Global 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: Liberty Global has an earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: LibertyGlobal has a Zacks Rank #2 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

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

Liberty Global PLC Price and EPS Surprise

Liberty Global PLC Price and EPS Surprise | Liberty Global PLC Quote

Stock to Consider

Here is a company in the broader Consumer Discretionary sector that has the right combination of elements to post an earnings beat this quarter.

Cinemark Holdings Inc. CNK is expected to release fourth-quarter 2016 results around Feb 23, 2017. The company has an Earnings ESP of +2.38% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

The company's earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 4.29%.

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Netflix, Inc. (NFLX): Free Stock Analysis Report

Liberty Global PLC (LBTYA): Free Stock Analysis Report

Cinemark Holdings Inc (CNK): Free Stock Analysis Report

Vodafone Group PLC (VOD): 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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