Can Scripps Networks (SNI) Deliver a Beat in Q4 Earnings?

Scripps Networks Interactive, Inc. SNI is scheduled to report fourth-quarter 2017 results on Feb 26, after the market closes.

Last quarter, the company delivered a positive earnings surprise of 7.1%. Moreover, it has an impressive earnings history, having outperformed the Zacks Consensus Estimate in three of the last four quarters with an average beat of 10.6%.

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

Why a Likely Positive Surprise?

Our proven model shows that Scripps Networks is likely to beat on earnings with the perfect combination of the following two key ingredients:

Zacks ESP: Scripps Networks has an Earnings ESP of +1.36%. This is because the Most Accurate estimate of $1.25 per share is higher than the Zacks Consensus Estimate of $1.24. Moreover, a positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Scripps Networks holds a Zacks Rank #3 (Hold), which increases the predictive power of ESP. Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Scripps Networks Interactive, Inc Price and EPS Surprise

 

Scripps Networks Interactive, Inc Price and EPS Surprise | Scripps Networks Interactive, Inc Quote

Factors Likely at Play

Scripps Networks, scheduled to be acquired by Discovery Communications, Inc. DISCA this year, is expected to perform well on the top-line front in the fourth quarter. Strong growth in distribution revenues in its U.S. Networks division should aid results.

The company’s expansion efforts are a further positive. It has acquired TVN, Poland’s popular multi-platform media company, to fortify its position in the European market as well as enhance its advertising business. Additionally, it extended its food network partnership with Tribune Media Company TRCO. These deals are likely to boost results in the quarter.

However, escalated costs are likely to hurt the bottom line in the to-be-reported quarter as in the previous one. Weakness in the U.S. advertising market also poses a threat to its results in the soon-to-be-reported period.

Another Stock to Consider

Investors interested in the broader Consumer Discretionary sector may also consider Norwegian Cruise Line Holdings Ltd.  NCLH, as the stock has the right combination of elements to beat estimates in its next release.

Norwegian Cruise Line has an Earnings ESP of +0.64% and a Zacks Rank of 3. The company will report fourth-quarter earnings on Feb 22.

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