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Liberty Interactive Corp. (QVCA) Q2 Earnings: What’s Up?


Liberty Interactive Corporation QVCA is expected to report second-quarter 2017 results on Aug 8, before the opening bell.

Last quarter, the company delivered a positive earnings surprise of 12.12%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average negative surprise of 1.98%.

Over the past three months, price performance of Liberty Interactive has been impressive. The share price has grown 11.3%, outperforming the industry’s 6.5% gain.

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

Factors Likely to Influence this Quarter

Liberty Interactive’s businesses are susceptible to rapid technological changes, which increase expenses. The company continues to face headwinds such as global economic crisis, foreign exchange risks and market competition. Liberty Interactive competes with large online sellers like Amazon.com Inc. AMZN and Alibaba Group Holding Ltd.

However, the company’s QVC division continues to benefit from the surge in online sales. The major thrust is expected to come from the growing adoption of high-end smartphones in the U.S. QVC is expanding its presence in developed international markets, which will enable it to achieve a high rate of growth. Liberty Interactive is also highly optimistic about its operations in China. Recently, QVC announced plans to acquire fellow home-shopping platform, Home Shopping Network HSNI,in an all-stock deal valued at $2.1 billion.

Liberty Interactive already owns 38% of HSN and will purchase the remaining 62% of the network. The newly combined company will likely have $14 billion in revenues and 23 million customers around the world, expectedly.

Earnings Whispers

Our proven model does not conclusively show that Liberty Interactive Corporation is likely to beat estimates 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. That is not the case here, as you will see below.

Zacks ESP: Liberty Interactive Corporation has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 41 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

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.

Stock to Consider

J. C. Penney Company, Inc. JCP from the broader Retail-Wholesale sector has the right combination of elements to post an earnings beat when it expectedly reports second-quarter 2017 results on Aug 11. The company has an Earnings ESP of +142.86% and a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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