Meredith (MDP) Earnings Likely To Decline In Q2: Here's Why
Zacks Investment Research | Jan 21, 2018 08:05PM ET
Meredith Corporation (NYSE:MDP) is expected to release second-quarter fiscal 2018 results on Jan 24. In the preceding quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 9.5%. Moreover, it had posted an average earnings beat of 7.1% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is 91 cents, reflecting year-over-year decline of 30%. We note that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $416.9 million compared with $442.6 million reported in the year-ago quarter.
Factors Influencing this Quarter
Management had earlier stated that Meredith’s earnings in second-quarter fiscal 2018 are likely to be in the range of 87-92 cents a share, down from $1.30 reported in the prior-year quarter. Sharp decline in earnings projections for the quarter is primarily due to benefits of 54 cents registered in the year-ago period from robust political advertising revenues.
Moreover, with the advancement of technology, the print media is on a decline. Increasing online readership is compelling Meredith to put extra initiative behind its portfolio of magazines. Though the company is expanding its presence in digital presence, it will take time to complete the metamorphosis.
Notably, the company’s strategic initiatives particularly in digital space, brand licensing activities, solid portfolio of television stations and robust earnings surprise history reinforce its position as one of the leading media and marketing companies. Moreover, the company remains optimistic to generate solid no-political adverting revenues in Local Media Group attributable to robust demand for automotive and professional services.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Meredith 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 Zacks Investment Research
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