What's in Store for Sirius XM (SIRI) this Earnings Season? - Analyst Blog

Sirius XM Holdings Inc. (SIRI) will release its fourth-quarter and full year 2014 results on Feb 5 before the opening bell.
 
In the last quarter, the company had reported earnings on par with the Zacks Consensus Estimate. In fact, the company had reported in-line earnings in three of the last four quarters, with first-quarter 2014 as the odd one out witnessing lower-than-expected earnings. The trailing four-quarter average earnings miss is thus 8.33%. Let’s see how things are shaping up for this announcement.

Factors to Consider
 
Sirius XM Holdings is highly optimistic about its growth prospects as most of its radio services are available in 26% of the cars plying in the U.S. In Jan 2015, the company pre-announced that it has exited 2014 with 27.3 million subscribers (1.75 million net subscriber additions in the year). The figure was higher than the company's guidance provided in October that estimated 1.5 million net additions. Self-pay net additions in the year were 1.44 million, again ahead of the company's guidance of 1.25 million. The company expects the strong performance of 2014 to continue in this year as well. Based on this belief, it has provided an encouraging projection for 2015 in January. We are also pleased with the company’s efforts to reward shareholders through share buybacks.
 
On the flip side, Sirius XM’s success largely depends on the future of the U.S. auto industry. Therefore, even a minor fluctuation in auto sales may significantly affect the company’s financials. Moreover, stiff competition from other industry players coupled with continuous evolution of technology may pose serious threats to the company’s profits, moving ahead.

Earnings Whispers
 
Our proven model does not conclusively show that Sirius XM is likely to beat the Zacks Consensus Estimate 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. Unfortunately, that is not the case here as elaborated below.
 
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00% for Sirius XM, as both the figures stand at 3 cents.  
 
Zacks Rank: Sirius XM has a Zacks Rank #4 (Sell).

Stocks to Consider
 
Here are some companies you may want to consider instead as our model shows these have the right combination of elements to post an earnings beat:

AMC Networks Inc. (AMCX), with an earnings ESP of +6.86% and a Zacks Rank #3 (Hold).

Scripps Networks Interactive, Inc. (SNI), with an earnings ESP of +1.06% and a Zacks Rank #3.

Grupo Televisa, S.A.B. (TV), with an earnings ESP of +13.51% and a Zacks Rank #3.

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GRUPO TELEVISA (TV): Free Stock Analysis Report
 
SIRIUS XM HLDGS (SIRI): Free Stock Analysis Report
 
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AMC NETWORKS- A (AMCX): Free Stock Analysis Report
 
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