Weak Political Ad Revenues To Mar Meredith (MDP) Q1 Earnings

Meredith Corporation (NYSE:MDP) , one of leading media and marketing companies in the United States, is slated to release first-quarter fiscal 2018 results on Oct 26. In the previous quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 11.5%. Moreover, in the trailing four quarters, it delivered an average earnings beat of 5.8%. Let’s see how things are shaping up prior to this announcement.

Factors Influencing this Quarter

Management had earlier stated that Meredith’s earnings in first-quarter fiscal 2018 are likely to be in the range of 60-65 cents a share, down from 75 cents reported in the prior-year quarter. Sharp decline in earnings projections for the quarter is primarily due to benefits of 22 cents registered in the year-ago period from robust political advertising revenues. Further, shift from traditional advertising and stiff competition may impact performance.

Nevertheless, strategic endeavors such as increase in digital offerings, the launch of new magazine, The Magnolia Journal, and addition of newscasts across television stations, along with focus on non-advertising revenue generating avenues such as retransmission fees, brand licensing and e-commerce are likely to drive the top line higher.

To strengthen its position, Meredith has launched additional newscasts in the Atlanta, Phoenix, Portland, Nashville, Greenville and Flint/Saginaw markets. The company also renewed licensing program with Wal-Mart Stores (NYSE:WMT), which allows it to showcase 3,000 SKUs of Better Homes & Gardens branded products at 5,000 outlets and on Walmart.com.

What to Expect?

The current Zacks Consensus Estimate for the quarter under review is 64 cents, reflecting a year-over-year decrease of over 15%. We note that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $397.1 million compared with $400 million reported in the year-ago quarter.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Meredith is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Meredith has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 64 cents. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Twenty-First Century Fox, Inc. (NASDAQ:FOXA) has an Earnings ESP of +1.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Charter Communications, Inc. (NASDAQ:CHTR) has an Earnings ESP of +5.66% and a Zacks Rank #3.

Comcast Corporation (NASDAQ:CMCSA) has an Earnings ESP of + 0.13% and a Zacks Rank #3.

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