Liberty Media (LMCA) Q1 Earnings: Stock To Pull A Surprise?
Zacks Investment Research | May 03, 2016 10:00PM ET
Liberty Media Corporation (NASDAQ:LMCA) is slated to release first-quarter 2016 earnings on May 9, before the market opens.
Last quarter, the company reported earnings in line with the Zacks Consensus Estimate. Let’s see how things are shaping up ahead of this announcement.
Factors Likely to Influence this Quarter
Liberty Media holds a 27.3% stake in Charter Communications Inc. (NASDAQ:CHTR) and stands to gain significantly from the investment. Notably, Charter Communications is awaiting a Federal Communications Commission (FCC) approval for the Time Warner Cable Inc. (NYSE:TWC) acquisition, which will position the company as the second-largest cable Multi Service Operator (MSO) in the U.S. after Comcast (NASDAQ:CMCSA). Notably, Charter Communications’ shareholders have sanctioned Liberty Media’s impending buyouts of Time Warner Cable and Bright House. The deals are likely to benefit Charter Communications in terms of geographic expansion and operating cost synergies, which in turn, will boost its bottom line and free cash flow.
On the flip side, Liberty Media’s businesses are susceptible to rapid technological changes. Large cable TV operators are increasingly deploying digital TV networks, which is enabling them to gain significant market traction. This may hurt the channel positioning of Liberty Media’s networks. Moreover, increasing deployment of personal video recorders, video-on-demand technology and IPTV network are systematically changing the distribution and viewing habits of common people.
Earnings Whispers
Our proven model does not conclusively show that Liberty Media is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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