Media Stocks To Watch For Q3 Earnings On Nov 1: DISCSA, GTN

The picture emerging from the ongoing Q3 earnings season is quite impressive. According to our latest Earnings Preview report, the quarter is likely to be the first one to witness year-over-year improvement in the bottom line n (in the S&P 500 index), after five consecutive quarters of earnings decline.

As of Oct 28, about 58.2% of the S&P 500 companies (representing 68.5% in terms of market capitalization) had reported their quarterly numbers. The aforesaid report states that earnings and revenues of these companies have grown 2.2% and 1.3%, respectively. The S&P 500 Index is projected to end Q3 with an earnings growth of 2% while the top line is set to inch up 1.4%. In fact, 12 of the 16 Zacks sectors are projected to end Q3 with earnings growth.

The Consumer Discretionary sector – one of the 12 Zacks sectors that are slated to outperform – includes Media stocks. The Consumer Discretionary sector has so far seen reports from 40% of its sector participants (in the S&P 500 Index). The earnings growth rate is 8.2% with 64.3% companies reporting better-than-expected earnings so far.

The current week will be a busy one with several companies slated to release their earnings reports. In fact, 1085 companies – including 130 S&P 500 members – are scheduled to unveil their quarterly numbers this week. Of the 130 S&P 500 companies, reports from media companies like Time Warner Inc. (NYSE:TWX) and CBS Corp. (NYSE:CBS) are highly awaited this week.

Meanwhile, let’s take a look as to how media stocks like Discovery Communications Inc. (NASDAQ:DISCA) and Gray Television, Inc. (NYSE:GTN) might fare when they report Q3 results on Nov 1.

Discovery Communications Inc., based in Silver Spring, MD, offers original and purchased programming in the U.S. as well as multiple countries across the globe. According to our model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) – to increase its odds of an earnings surprise. The company has an Earnings ESP of -2.33% and carries a Zacks Rank # 4 (Sell). Conversely, we advise investors not to consider Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions. (Read more: Discovery Communications Q3 Earnings Preview).

DISCOVERY COM-A Price and EPS Surprise

DISCOVERY COM-A Price and EPS Surprise | DISCOVERY COM-A Quote

Gray Television, Inc. is an Atlanta, GA-based communications company, carrying a Zacks Rank #4. Both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 41 cents, resulting in an Earnings ESP of 0.00%.

GRAY TELEVSN Price and EPS Surprise

GRAY TELEVSN Price and EPS Surprise | GRAY TELEVSN Quote

Please check our Earnings ESP Filterthat enables you to find stocks that are expected to come out with earnings surprises.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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