News Corporation NWSA, the diversified media conglomerate, is slated to report third-quarter fiscal 2017 results on May 9. The question lingering in investors’ minds is whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, News Corporation underperformed the Zacks Consensus Estimate by an average of 7.8%.
Which Way are Estimates Treading?
Let’s look at earnings estimate revisions in order to get a clear picture of what analysts are thinking about the company right before earnings release. The current Zacks Consensus Estimate for the quarter under review has been stable in the past 30 days, and is currently pegged at 4 cents, in line with the year-ago quarter. Analysts polled by Zacks expect revenues of $1,866 million compared with $1,891 million reported in the prior-year period.
What the Zacks Model Unveils?
Our proven model does not conclusively show that News Corporation is likely to beat earnings estimates this quarter. This is because 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.
News Corporation has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 4 cents. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
News Corporation Price, Consensus and EPS Surprise
News Corporation Price, Consensus and EPS Surprise | News Corporation Quote
Factors Influencing this Quarter
News Corporation is in a transitionary phase, looking to diversify revenue streams through strategic acquisitions and operational enhancement. The company is expanding its digital offerings, along with greater emphasis on real estate businesses. However, foreign currency headwinds and soft print advertising demand continue to weigh upon the company’s performance to an extent.
Advertising, which forms a major part of News Corporation’s total revenue (approximately 44% of fiscal 2016 total revenue), remains highly vulnerable to the economic conditions. Advertising revenue fell 5% during the second quarter of fiscal 2017 at the News and Information Services segment. Adverse foreign currency fluctuations hurt total revenue by $53 million.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat: