Is Tribune Media (TRBAA) Poised to Beat Earnings in Q3?
Tribune Media Company (TRBAA) is slated to release its third-quarter 2014 results before the opening bell on Nov 11.
Last quarter, Tribune Media had delivered a positive earnings surprise of 35.48% – the sole earnings beat achieved by the company in the last four quarters. However, the trailing four-quarter average miss is 9.87%. Let’s see how things are shaping up for this announcement.
Factors at Play
We expect the multimedia company to report strong revenues in the third quarter of 2014. The Broadcasting business of the company should also perform well in the quarter, driving top-line growth. Moreover, Tribune Media’s third quarter revenues should receive a boost from the acquisition of Gracenote, which was acquired in Feb 2014. Following the acquisition, Tribune Media has expanded its reach into fields such as streaming music services, mobile devices and automotive infotainment.
One of the most important events in the third quarter was the separation of Tribune Media’s Publishing business. The spin-off has allowed Tribune Media to focus exclusively on its core areas of strength. Following the completion of the transaction in Aug 2014, Tribune Company came to be renamed as Tribune Media Company. Investors are thus keenly looking forward to the first earnings report of the company, post the spin-off.
Earnings Whispers?
Our proven model does not conclusively show that Tribune Media 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, 2 or 3 for this to happen. That is not the case here, as you will see below:
Zacks ESP: Tribune Media has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 31 cents.
Zacks Rank: Tribune Media carries a Zacks Rank #2 (Buy) which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
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.
Stocks to Consider
Here are a few companies worth considering which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Best Buy Co., Inc. (BBY), with an Earnings ESP of +4.17% and a Zacks Rank #1 (Strong Buy).
Manchester United plc (MANU), with an Earnings ESP of +33.33% and a Zacks Rank #3.
BlackBerry Limited (BBRY), with an Earnings ESP of +83.33% and a Zacks Rank #2.
Read the Full Research Report on BBY
Read the Full Research Report on MANU
Read the Full Research Report on BBRY
Read the Full Research Report on TRBAA
Zacks Investment Research
