Advertising Stocks To Watch For Earnings On Aug 9: HHS, YUME

The Q2 earning season is almost winding up with most of the sectors having wrapped up their releases, except the Retail sector which has a significant number of Q2 earnings yet to be reported. Almost 87% of the total S&P 500 index members have released their second-quarter results through Aug 5.

This week we’ll see the final onslaught, as we await releases of over 525 companies, including 26 S&P 500 club members hailing from Retail.

Per the latest Earnings Preview report, 433 S&P 500 companies have reported their second-quarter earnings so far with 70.7% topping bottom-line estimates and 52.7% coming in ahead of top-line expectations. The overall report suggests that earnings results have moved south 4.1%, on a 0.9% decrease in revenues from the same period last year.

The poor earnings picture is majorly attributable to the inherent weakness of the Energy sector. Six out of 16 Zacks sectors are expected to hover in the negative territory in Q2, with Energy, Basic Materials, Aerospace and Transportation suffering double-digit declines. The second quarter is headed to be the fifth in a row to suffer an earnings decline for the benchmark index.

The Business Services sector is looking reasonably good. For the sector, earnings are expected to grow 6%, while sales are touted to rise 6.6% over last year. The projected improvement is largely due to a recovery in oil prices in the second quarter and the faded effects of the dollar strength.

Among advertising stocks, which are a part of the broader Business Services sector, slated to report this week, let’s have a sneak peek at two major industry players to see how things are gearing up for the upcoming results.

Harte-Hanks Inc. (NYSE:HHS) is scheduled to report second-quarter results before market open on Aug 9. The company provides marketing services and shopper advertising opportunities to local, regional, national and international consumers and business-to-business marketers.

As per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for it to beat estimates. For the quarter to be reported, this Zacks Rank #5 (Strong Sell) stock has an Earnings ESP of 0.00%, thus making an earnings prediction difficult. As it is, we caution against stocks with a bearish Zacks Rank #4 (Sell) or #5 going into the announcement.

Over the trailing four quarters, the company has beaten estimates twice, with an average negative surprise of 109.96%.

YuMe, Inc. (NYSE:YUME) is scheduled to report second-quarter results after the market close on Aug 9. The company offers technologies that connect advertisers, app developers, content distributors, consumer electronics manufacturers, and publishers.

For the quarter to be reported, this Zacks Rank #3 stock has an Earnings ESP of 0.00%, thus making an earnings prediction uncertain. Over the trailing four quarters, the company has beaten estimates thrice, with an average positive surprise of 155.09%.