Will Poor Box Office Show Drag Lions Gate (LGF) Q1 Earnings?

Zacks Equity Research

August 5, 2014 at 4:35 p.m.

Lions Gate Entertainment Corp. (LGF) is set to report its first-quarter fiscal 2015 results on Aug 7, 2014. Last quarter, it posted a negative earnings surprise of 12.8%. Let us see how things are developing for this announcement.

Growth Factors This Quarter

Lukewarm box office response to Lions Gate’s releases in the quarter, which include Draft Day and The Quiet Ones, is likely to weigh on the company’s quarterly performance. Adding to the woes is the absence of any near-term catalyst that can boost its performance. The company expects a strong second half 2015 given the release of the highly anticipated third installment of The Hunger Games franchise.

Earnings Whispers

Our proven model does not conclusively project Lions Gate as likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and Zacks Rank #1 #2 or #3 for this to happen. This is not the case here as you will see below.

Zacks ESP: Lions Gate currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 14 cents per share.

Zacks Rank: Lions Gate’s Zacks Rank #4 (Sell) when combined with a 0.00% ESP makes surprise prediction unlikely. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

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

The Andersons, Inc. (ANDE) with an Earnings ESP of +6.09% holds a Zacks Rank #1 (Strong Buy).

Liberty Media Corporation (LMCA) has an Earnings ESP of +7.04% and a Zacks Rank #3 (Hold).

Macy's, Inc. (M) has an Earnings ESP of +1.16% and a Zacks Rank #3.

Read the Full Research Report on LGF
Read the Full Research Report on LMCA
Read the Full Research Report on M
Read the Full Research Report on ANDE

Zacks Investment Research

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