Will Comcast (CMCSA) Disappoint Earnings Estimates in Q3?
Leading cable multi service operator (MSO) in the U.S., Comcast Corporation (CMCSA), is slated to report its third-quarter 2014 results on Oct 23, before the opening bell.
In the previous quarter, Comcast reported a positive earnings surprise of 4.2%. In fact, the company has outpaced the Zacks Consensus Estimate in three of the last four quarters with an average earnings beat of 4.0%. Let’s see how things are shaping up for this announcement.
Factors at Play
Launch of innovative services, enhanced customer support, improved customer retention efforts and a recent deal with Netflix to deliver content directly to the video streaming company’s customers without affecting video quality, should drive Comcast’s revenues higher in the coming quarter.
On the flip side, intensifying competition from large carriers and low-cost video streaming companies, mounting programming costs, and persistent video subscriber loss pose significant headwinds for the company.
Earnings Whispers?
Our proven model does not conclusively show that Comcast is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Negative Zacks ESP: Comcast has an earnings ESP of -1.43%. This is because the Most Accurate estimate stands at 69 cents while the Zacks Consensus Estimate is pegged higher at 70 cents.
Zacks Rank: Comcast carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise.
On the other hand, we caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some other companies for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:
Silver Spring Networks, Inc. (SSNI) has an earnings ESP of +10.53% and carries a Zacks Rank #3.
Liberty Interactive Corporation (QVCA) has an earnings ESP of +10.00% and a Zacks Rank #3.
DragonWave Inc. (DRWI) has an earnings ESP of +16.67% and a Zacks Rank #3.
Read the Full Research Report on CMCSA
Read the Full Research Report on SSNI
Read the Full Research Report on DRWI
Read the Full Research Report on QVCA
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