Media Stock Earnings Lineup For Nov 6: FOXA, ROKU, LBTYA

Media companies are witnessing a mixed earnings season. Streaming giant Netflix (NASDAQ:NFLX) missed its U.S. subscriber addition target in the third quarter primarily due to the price hike announced by the company in January.

Meanwhile, legacy media giants like Comcast (NASDAQ:CMCSA) and Charter Communications (NASDAQ:CHTR) continued to lose voice, video and Pay TV subscribers due to persistent cord-cutting and stiff competition from streaming services like Netflix, Hulu, HBO and Amazon (NASDAQ:AMZN) Prime.

For instance, Comcast lost 224K video customers and 65K voice customers in the third quarter of 2019. Further, Charter lost 75K video customers in the third quarter.

Moreover, increasing programming costs and retransmission fees have dragged down the profitability of industry participants like AMC Networks.

However, these factors were somewhat negated by increasing demand for high-speed Internet service. Notably, while Comcast added 379K high-speed Internet customers, Charter’s residential and SMB Internet net additions were 380K in the reported quarter.

Also, increasing investments in original content and focus on providing quality entertainment helped media companies generate favorable results.

Solid content portfolio helped Sirius XM Holdings (NASDAQ:SIRI) gain 210K net subscribers in the third quarter of 2019. The company also added 302K net self-pay subscribers in the reported quarter. Moreover, Pandora added 33K net self-pay subscribers and exited the third quarter with nearly 6.3 million self-pay subscribers.

Additionally, AMC Networks’ SVOD service Acorn TV surpassed 1 million subscribers in the recently reported third quarter, reflecting a strong content portfolio.

Sneak Peek Into a Few Upcoming Releases

Let us take a look at three media companies set to report on Nov 6.

New York-based Fox Corporation’s (NASDAQ:FOXA) first-quarter fiscal 2020 top-line performance is expected to reflect portfolio strength across entertainment, sports and news content. The dominant position of Fox News Channel in the cable news space is expected to have aided the top line.

Additionally, the healthy advertising market is driving ad pricing, particularly for sports and news content. This is expected to have driven the top line in the to-be-reported quarter.

Notably, Fox became a standalone, publicly-traded company on Mar 21, following the merger of Disney and Twenty-First Century Fox, Inc.

The company has an Earnings ESP of +2.97% and a Zacks Rank #3 (Hold), which makes us confident about an earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

According to the Zacks model, a company with a positive Earnings ESP along with a Zacks Rank #1, 2 (Buy) or 3 has a good chance of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Meanwhile, the Zacks Consensus Estimate for earnings has increased 6% to 70 cents over the past 30 days. (Read More: Fox Corp to Report Q1 Earnings: What's in Store?)

Los Gatos, CA-based Roku (NASDAQ:ROKU) has an Earnings ESP of 0.00% and a Zacks Rank #1, which makes surprise prediction difficult.

The popularity of The Roku Channel is expected to have led to active accounts growth in the third quarter of 2019, which is an important metric for Roku. In the second quarter, active accounts surged 39% year over year to 30.5 million.

Additionally, increasing active accounts are expected to have attracted advertisers to the platform in the third quarter. (Read More: ROKU to Report Q3 Earnings: Factors Influencing Results)

Moreover, the consensus mark for a loss remained unchanged at 28 cents over the past 30 days.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 76.7%.

London-based Liberty Global (NASDAQ:LBTYA) has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell), which makes surprise prediction difficult.

Customer losses in the video and voice segment are expected to have continued in the third quarter of 2019 primarily due to stiff competition in the market.

The consensus mark for earnings stayed at 16 cents over the past 30 days. Liberty Global had reported a loss of 56 cents in the year-ago quarter.

Notably, the company’s earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters, the average negative surprise being 254.03%.

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