Factors Setting the Tone for SeaWorld (SEAS) in Q1 Earnings
SeaWorld Entertainment, Inc. SEAS is scheduled to report first-quarter 2018 numbers on May 8, before the opening bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 33.3%. Notably, in three out of trailing four quarters, the company’s earnings missed the consensus mark.
Q1 Expectations
The question lingering in investors’ minds now is whether SeaWorld will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the first quarter is pegged at a loss of 76 cents, wider than the loss of 66 cents reported in the prior-year quarter. Meanwhile, analysts polled by Zacks expect revenues of nearly $197.7 million, up 6.1% from the prior-year quarter.
Let’s delve deeper to find out how the company’s top and bottom lines will shape up this earnings season.
Factors at Play
Historically, the first and fourth quarters of each year are seasonally weak for SeaWorld. The company’s top line is expected to decline sequentially but is poised to witness year-over-year growth. Meanwhile, SeaWorld is increasingly focusing on its marketing strategy to highlight brand attributes and new additions. All of these are expected to boost attendance in the quarter under review. Further, in an effort to drive attendance, the company is introducing new rides at most of its parks. However, declining attendance in California, Texas and Florida markets has been a cause of concern for the company.
Furthermore, the company earlier launched tactical pricing initiatives at several of its locations. The combination of direct price increases and dynamic pricing initiatives might drive admissions per capita in the quarter under review. Nevertheless, we are optimistic about the company’s sincere efforts to control costs without denting efficiency and improve financial standing through debt refinancing. The company expects to achieve net cost savings of $40 million by the end of 2018.
SeaWorld Entertainment, Inc. Price, Consensus and EPS Surprise
SeaWorld Entertainment, Inc. Price, Consensus and EPS Surprise | SeaWorld Entertainment, Inc. Quote
What Does the Zacks Model Unveil?
Our proven model does not show that SeaWorld is likely to beat earnings estimates 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
SeaWorld has an Earnings ESP of -6.18%. Although, the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident of an earnings surprise.
Stocks to Consider
Here are some stocks from the Consumer Discretionary sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat in the to-be-reported quarter:
Earnings ESP for Walt Disney DIS, Marriott MAR and Discovery Communications DISCA is +0.94%, +0.40% and +0.39%, respectively. These stocks hold a Zacks Rank #3. All the companies are scheduled to report quarterly numbers on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.
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