Scripps Networks (SNI) Q2 Earnings: What's In The Cards?

Scripps Networks Interactive, Inc. (NASDAQ:SNI) is scheduled to release second-quarter 2016 financial numbers, before the opening bell on Aug 9.

In the last quarter, Scripps Networks posted a positive earnings surprise of 35.64%. In fact, the company boasts an impressive history with respect to earnings, having outshined the Zacks Consensus Estimate in each of the last four quarters. The average earnings beat for the company stands at 23.81%.

Factors at Play

Scripps Networks is expected to gain from its acquisition of TVN completed last year. TVN is a Polish multi-platform media company and will help Scripps Networks expand its presence in Europe. The company is also expected to benefit from the completion of the remaining 35% stake purchase in Travel Channel Media from Cox Communications Inc. Scripps Networks has also entered into a content licensing deal with Amazon (NASDAQ:AMZN). Meanwhile, the company’s focus on expanding viewership across the globe should boost revenues.

However, foreign currency risks associated with the company’s global operations are a concern. Moreover, the company has a high concentration of revenues coming from marketing and advertising. This revenue stream is dominated by U.S. corporate sector spending and can be adversely affected in case of market downturn.

Notably, a few of other media companies such as Discovery Communications Inc. (NASDAQ:DISCA) and Viacom Inc. (NASDAQ:VIAB) have beat earnings estimates for the quarter ending Jun 30, 2016. Let’s see how Scripps Networks is poised ahead of the earnings release.

Earnings Whispers

Our proven model does not conclusively show that Scripps Networks is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Zacks ESP: The Earnings ESP for Scripps Networks is -1.34% as the Most Accurate estimate is 2 cents below the Zacks Consensus Estimate of $1.49.

Zacks Rank: Scripps Networks carries a Zacks Rank #3 which increases the predictive power of ESP. However, that alone is not sufficient to secure an earnings beat.

As a caution, we advise investors not to consider Sell-rated (Zacks Rank #4 or 5) stocks going into an earnings announcement.

SCRIPPS NETWRKS Price and EPS Surprise

SCRIPPS NETWRKS Price and EPS Surprise | SCRIPPS NETWRKS Quote

Stock to Consider

We present below a company you may want to consider as our model shows this has the right combination of elements to post an earnings beat this quarter.

Tahoe Resources (NYSE:TAHO) has an earnings ESP of +8.33% and a Zacks Rank #2. It is expected to report second quarter earnings on Aug 9.