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Here Are Factors Influencing Gannett's (GCI) Q1 Earnings

Zacks Equity Research

Gannett Co, Inc. GCI is slated to report first-quarter 2019 results on May 1. The company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters. In the last reported quarter, the company delivered a negative earnings surprise of 13.7%.

How Are Estimates Faring?

The Zacks Consensus Estimate for earnings in the first quarter is pegged at a loss of 3 cents, implying a decline from earnings of 13 cents reported in the year-ago quarter. We note that the consensus mark has remained stable in the past 30 days.

The consensus mark for revenues currently stands at $669.6 million, indicating a decrease of roughly 7.4% from the year-ago quarter’s reported figure. We note that total revenues of this Virginia-based company had declined 12% year over year in the last reported quarter.

Let’s delve deeper and analyze the factors impacting the upcoming quarterly results.

Gannett Co., Inc. Price and EPS Surprise

Gannett Co., Inc. Price and EPS Surprise | Gannett Co., Inc. Quote

Factors at Play

Declining print readership, soft advertising revenues and lower circulation revenues are major concerns for Gannett, which may persist in the first quarter. To mitigate these, the company has undertaken initiatives to realign cost structure and streamline operations to increase efficiencies.

Gannett is also focused on improving digital business, with an aim to lower dependency on soft print media business and traditional advertising. In fact, management is progressing well with its plans to achieve more than 50% of its advertising and marketing sales from the digital platform. The company also intends to undertake acquisitions in order to strengthen position among its industry peers.

Rapid digitization in the core areas of advertising, subscriptions and sales, printing, and distribution services has turned out to be a major source of revenues and Gannett is focusing on the same. Additionally, the company is making investments in creating video content. These factors are expected to provide some support to the upcoming quarterly results.

What the Zacks Model Unveils

Our proven model does not conclusively show that Gannett is likely to beat earnings estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Gannett has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell), which makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Stocks With Favorable Combination

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Shopify Inc. SHOP has an Earnings ESP of +35.72% and a Zacks Rank #2.

Viacom Inc. VIAB has an Earnings ESP of +0.44% and a Zacks Rank of #3.

Charter Communications CHTR has an Earnings ESP of +5.33% and a Zacks Rank of #3.

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