Diversified media conglomerate, Gannett Co., Inc. (NYSE:GCI) is slated to report third-quarter 2016 results on Oct 27. In the previous quarter, the company reported in-line earnings. Notably, in the trailing four quarters, it outpaced the Zacks Consensus Estimate by an average of 38.6%.
Unlikely to Beat Estimates
Our proven model does not conclusively show that Gannett is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Gannett has an Earnings ESP of +29.41% as the Most Accurate estimate stands at 22 cents, while the Zacks Consensus Estimate is pegged at 17 cents. However, the company carries a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement.
Factors Influencing this Quarter
Gannett is realigning its cost structure and streamlining its operations to increase efficiencies and safeguard its earnings and cash flows from dwindling print advertising revenues. Additionally, it is focused on improving its digital business and has undertaken strategic acquisitions. However, management had earlier stated that margins will remain under pressure in the third quarter due to investments made. Moreover, we observed that the company’s top line has fallen short of the Zacks Consensus Estimate in the last five quarters. Further, the company anticipates headwinds in the form of unfavorable foreign currency translations.
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:
Amazon.com, Inc. (NASDAQ:AMZN) has an Earnings ESP of +10.47% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
New Media Investment Group Inc. (NYSE:NEWM) has an Earnings ESP of +35.29% and carries a Zacks Rank #3.
Time Warner Inc. (NYSE:TWX) has an Earnings ESP of +1.49% and also carries a Zacks Rank #3.
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