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Time Warner (TWX): Stock Poised to Beat Earnings in Q1?

Time Warner Inc. TWX, the media and entertainment company, is expected to report first-quarter 2016 results before the market opens on May 4. The big question facing investors now is, whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 12.5%. Let’s see how things are shaping up for this announcement.

Zacks Model Shows Likely Earnings Beat

Our proven model shows that Time Warner is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. The Most Accurate estimate stands at $1.31 and the Zacks Consensus Estimate is pegged at $1.29. So the ensuing +1.55% ESP and the company’s Zacks Rank #3 (Hold) make us reasonably confident of an earnings beat.

Factors Influencing This Quarter

We believe Time Warner’s foray into new markets and digital endeavors augur well for its operational performance. We also think that the company’s focus on original programming, cost reduction and increasing investments in key areas will enhance profitability. Additionally, the company has been expanding its digital presence to enable consumers to access content from several platforms and devices. The company's investments in video content and technology continued to drive results. All these initiatives may find reflection in the quarter to be reported.

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. FOXA has an Earnings ESP of +2.17% and a Zacks Rank #3.

Discovery Communications, Inc. DISCA has an Earnings ESP of +2.22% and a Zacks Rank #3.

Nexstar Broadcasting Group, Inc. NXST has an Earnings ESP of +19.40% and a Zacks Rank #3.

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TIME WARNER INC (TWX): Free Stock Analysis Report
 
NEXSTAR BRDCSTG (NXST): Free Stock Analysis Report
 
DISCOVERY COM-A (DISCA): Free Stock Analysis Report
 
TWENTY-FST CF-A (FOXA): Free Stock Analysis Report
 
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