Salem Media (SALM) To Report Q2 Earnings: What's In Store?

Salem Media Group (NASDAQ:SALM) is set to release second-quarter 2019 results on Aug 8.

The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 40.2%.

In the last reported quarter, earnings of 1 cent per share beat the Zacks Consensus Estimate of a loss of 2 cents. The company had reported earnings of 3 cents in second-quarter 2018.

Revenues declined 5.2% year over year to $60.5 million as well as lagged the consensus mark.

For second-quarter 2019, Salem Media expects revenues to be up 1-3%, excluding the impact of political revenues, recent acquisitions and dispositions.

The Zacks Consensus Estimate for revenues is currently pegged at $65.1 million, indicating a decline of 1.8% from the figure reported in the year-ago quarter.

Moreover, the Zacks Consensus Estimate for earnings now stands at 6 cents, moving up a penny, over the past 30 days.

Let’s see how things are shaping up prior to this announcement

Factors to Consider

Salem Media’s June-end quarter results will likely be negatively impacted by lower political revenues and market share loss to digital and programmatic ad providers, particularly Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL).

However, the company’s focus on Salem Surround might aid its top-line growth. Notably, in the first quarter, local digital revenues jumped 53% courtesy Salem Surround, which also reported modest profits for the first time in its operating history.

The company strengthened its management team with the appointments of Andy Massingill as the Regional Digital sales director for the West Region and Jon Latzer for the East Region.

Nevertheless, higher investments on Salem Surround are expected to keep margins under pressure. Notably, in the last reported quarter, broadcast expenses flared up 2% year over year primarily due to investments in growing and developing Salem Surround.

During the to-be-reported quarter, Salem Media expanded into TV with the adaptation The Eric Metaxas Radio Show on the Trinity Broadcasting Network.

Moreover, improving popularity of Dr. Sebastian Gorka’s show was reflected by the fact that it was in the top 30 list of the TALKERS Magazine’s 100 most important radio talk show hosts in America.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Salem Media carries a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Callaway Golf (NYSE:ELY) has an Earnings ESP of +6.40% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Viacom (NASDAQ:VIAB) has an Earnings ESP of +2.08% and carries a Zacks Rank #3.

AMC Entertainment (NYSE:AMC) has an Earnings ESP of +15.29% and holds a Zacks Rank #3.

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