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How News Corporation (NWSA) Looks Just Ahead of Q2 Earnings

Zacks Equity Research

News Corporation NWSA is scheduled to report second-quarter fiscal 2020 numbers on Feb 6. This diversified media conglomerate delivered in-line earnings in the preceding quarter. For the trailing four quarters, the company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 11 cents, suggesting a decline of about 39% from year-ago earnings of 18 cents. The consensus mark for revenues is pegged at $2,490 million, indicating a 5.2% drop from the year-ago quarter.

Key Factors to Note

News Corporation has been witnessing declining advertising revenues at the News and Information Services segment for some time now, thanks to softness in the U.S. newspaper publishing industry. In fact, the advertising environment in Australia has been quite challenging, particularly for print. Moreover, management at its last earnings call highlighted that the company will continue to face tough year-over-year comparisons for the Book Publishing segment. Also, currency remains a major headwind, which has been significantly marring the company’s top and bottom-line performance.

Management had earlier expected a positive financial impact at its News and Information Services segment. This was primarily backed by a fundamental shift in the content landscape on account of Facebook’s decision to pay premium for the company’s premium journalism. Moreover, News Corporation's cost cutting, robust digital offerings and emphasis on real estate services might provide some respite. Also, the company is diversifying its revenue streams through acquisitions and operational enhancement.

What Our Zacks Model Says

Our proven model does not predict an earnings beat for News Corporation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

News Corporation Price and EPS Surprise

News Corporation Price and EPS Surprise

News Corporation price-eps-surprise | News Corporation Quote

News Corporation carries a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

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

Cable One CABO has an Earnings ESP of +3.89% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DISH Network DISH has an Earnings ESP of +1.94% and a Zacks Rank of 2.

Discovery DISCA has an Earnings ESP of +0.21% and a Zacks Rank of 3.

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