Shaw Communications (SJR) Q3 Earnings: What's In Store?

Shaw Communications Inc. (NYSE:SJR) is scheduled to release its third-quarter fiscal 2016 results before the opening bell on Jul 15.

Last quarter, Shaw Communications had delivered a negative earnings surprise of 34.62%. The company’s earnings lagged the Zacks Consensus Estimate in three of the trailing four quarters, with an average miss of 11.19%. Let’s see how things are shaping up prior to this announcement.

Factors Likely to Influence This Quarter

The launching of new brands and advertising promotions along with the company’s anticipation of additional network fees are likely to push expenses, going forward. Shaw Communications’ margins are expected to be impacted by these increasing costs in the upcoming quarters.

Shaw Communications has recently ventured into the Canadian wireless market with the acquisition of WIND Mobile Corp. The Canadian wireless market is chiefly dominated by three big players – Rogers Communications Inc., TELUS Corp (NYSE:T) and BCE Inc (TO:BCE) . Together, these three firms control around 90% of the total market. Despite the fact that WIND Mobile is the fourth-largest wireless operator, its current scale of operations is significantly behind these three primary players.

Earnings Whispers

Our proven model does not conclusively show that Shaw Communicationsis likely to beat the Zacks Consensus Estimate this quarter. This 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. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: Shaw Communicationshas an earnings ESP of -23.08%. This is because the Most Accurate estimate is 20 cents while the Zacks Consensus Estimate is pegged higher at 26 cents.

Zacks Rank: Shaw Communicationshas a Zacks Rank #4 (Sell). Note that stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here is a company you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter:

AT&T Inc. (NYSE:T) has an earnings ESP of 1.39% and a Zacks Rank #2.