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What’s in Store for Gannett (GCI) Stock in Q1 Earnings?


Diversified media conglomerate, Gannett Co., Inc. GCI is slated to report first-quarter 2017 results on Apr 25. In the preceding quarter, the company posted a positive earnings surprise of 35.1%. In the trailing four quarters, the company’s earnings surpassed the Zacks Consensus Estimate by 28%.

What to Expect?

The question lingering in investors’ minds now is whether Gannett 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 7 cents, reflecting a year-over-year decrease of over 74%. We note that the Zacks Consensus Estimate has witnessed downward revisions in the past 60 days. Analysts polled by Zacks expect revenues of $763 million, up 15.7% from the year-ago quarter.

We noted that the stock has underperformed both the Zacks categorized Publishing-Newspapers industry and the S&P 500 index in the past six months. The company’s shares have declined 16.6%, while the Zacks categorized industry and the S&P 500 have observed gains of 2.5% and 8.1%, respectively.

Factors Influencing this Quarter

Gannett is realigning cost structure and streamlining operations to increase efficiencies and safeguard earnings and cash flows from dwindling print advertising revenue. Further, the company remains focused on improving digital business with an aim to lower dependency on soft print media business and traditional advertising. Print advertising revenue declined 15.3% and 14.2% in U.S and U.K, respectively. Meanwhile, digital advertising revenue advanced 14.4% in the fourth quarter.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Gannett 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.

Gannett has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 7 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:

Time Warner Inc. 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. AMCX currently has an Earnings ESP of +1.02% and a Zacks Rank #3.

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

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