Will Q3 Earnings Hold A Surprise For Meredith (MDP) Stock?

Meredith Corporation (NYSE:MDP) , one of leading media and marketing companies in the U.S. is slated to release third-quarter fiscal 2017 results on Apr 27. The company has outpaced the Zacks Consensus Estimate for 13 straight quarters when it reported the fiscal second quarter. In the trailing four quarters, it has posted an average earnings beat of 7.6%. Let’s see how things are shaping up prior to this announcement.

What to Expect?

The question lingering in investors’ minds now is whether Meredith will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 87 cents, reflecting a year-over-year decrease of nearly 6%. We note that the Zacks Consensus Estimate has increased by a couple of cents in the past 60 days. Analysts polled by Zacks expect revenues of $419.2 million compared with $422.8 million reported in the year-ago quarter.

We noted that the stock has outperformed the Zacks categorized Publishing-Periodical industry in the past one year and the S&P 500 index. The company’s shares have gained 33%, while the Zacks categorized industry and the S&P 500 have increased 29.2% and 12.3%, respectively.

Factors Influencing this Quarter

Meredith’s strategic initiatives particularly in digital space, solid earnings surprise history and strong financials are the pillars that reinforce its position as one of the leading media and marketing company. All these aided management to adopt a much more optimistic view about performance in the near future. The company raised earnings per share projection for the third quarter and fiscal 2017 on the back of better-than-expected advertising performance, primarily from digital operations at both National and Local Media Groups. Meredith’s expect third quarter earnings in the band of 85–87 cents, up from 75–80 cents.

However, with advancing technology, the print media is on a decline. Shift to online is likely to put enormous pressure on Meredith’s magazine portfolio. Nonetheless, the company is gradually expanding its digital presence.

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 -1.15% as the Most Accurate estimate is 86 cents while the Zacks Consensus Estimate is pegged higher at 87 cents. The company’s Zacks Rank #2 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:

Time Warner Inc. (NYSE:TWX) has an Earnings ESP of +0.69% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMC Networks Inc. (NASDAQ:AMCX) currently has an Earnings ESP of +1.02% and a Zacks Rank #3.

Viacom, Inc. (NASDAQ:VIAB) has an Earnings ESP of +3.39% and currently has a Zacks Rank #3.

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