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Cinemark Holdings (CNK) Q3 Earnings: What's in the Cards?

Cinemark Holdings Inc CNK is slated to report third-quarter 2017 results on Nov 3, before the opening bell.

Cinemark Holdings displays a positive earnings surprise history. The company beat the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 15.54%. However, in the last quarter, the company’s bottom line was on par with the Zacks Consensus Estimate.

Let’s see how things are shaping up for this announcement.

Factors at Play

Cinemark Holdings’ price performance has not been impressive in the past three months. The stock has declined 9.0% as against the industry’s gain of 1.9%.

The company continues to face threats from alternative movie streaming services such as Netflix, Inc, Time Warner Inc.’s TWX HBO Now and Hulu.  Despite the recent trend of audiences opting for streaming services, film studios are seeking better terms with large-screen theater companies. This might hamper profitability. The company also competes with AMC Entertainment Holdings Inc AMC ––a leisure and recreation services company in its same field.

As of Aug 10, Cinemark Holdings operates 529 theatres with 5,926 screens in 41 U.S. states, Brazil, Argentina, and 13 other Latin American countries. The company is headquartered in Plano, TX and is one of the leading motion picture exhibition company.

Cinemark Holdings has been opening and renovating theatres with state-of-the-art amenities. The company’s recent promotional plan of upgrading Connections Loyalty Program, with no charges, for members of Cinemark XD auditoriums bodes well. We believe that such renovations and attractive promotional offers should help the company witness subscriber growth in the to-be-reported quarter.

We are also impressed with Cinemark Holdings’ efforts to reward its stockholders with a quarterly cash dividend of 29 cents per share, which was paid on Sep 13 to stockholders of record on Aug 31.

Earnings Whispers

Our proven model does not conclusively show that Cinemark Holdings is 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: Cinemark Holdings has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 36 cents. You can uncover the best stocks to buy or sell before they’re reported with our">Earnings ESP Filter.

Zacks Rank: Cinemark Holdings has a Zacks Rank #4 (Sell).

Notably, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Cinemark Holdings Inc Price and EPS Surprise


Cinemark Holdings Inc Price and EPS Surprise | Cinemark Holdings Inc Quote

Key Pick

Here is a company from the broader Consumer Discretionary sector — which houses Cinemark Holdings — that has the right combination of elements to post an earnings beat this quarter.

Netflix Inc NFLX is expected to release fourth-quarter 2017 results on Jan 1. The company has an Earnings ESP of +1.58% and a Zacks Rank #2. You can see _1link">the complete list of today’s Zacks #1 Rank stocks here.

The company’s earnings beat the Zacks Consensus Estimate in two of the previous four quarters, with an average positive surprise of 1.25%.

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