DIRECTV (DTV) Earnings Preview: Another Earnings Positive Surprise?


DIRECTV (NASDAQ:DTV) will announce their financial results on Thursday before the market opens. In the last one year, the company’s earnings have topped the Wall Street analysts’ expectations comfortably between 2.3% and 19.5%. Therefore, it was quite natural that investors’ would expect the company to keep its winning streak in the December quarter too.

Earnings Expectations

Three months ago, analysts’ estimated DIRECTV (NASDAQ:DTV) to deliver earnings of $1.39 a share. They have revised upwards their estimations to $1.41 a share for the fourth quarter. However, Street analysts’ have cut their average estimation by a cent a share to $1.40 in the fourth quarter.

The current analysts’ average earnings estimation of $1.40 a share suggests 8.5% downtick from the year-ago quarter earnings of $1.53 a share. However, analysts’ are estimating sales growth of 3.6% to $8.91 billion from the previous year quarter’s $8.59 billion.

Jefferies have also reduced its earnings expectations for the media and entertainment industry in the fourth quarter. The brokerage pointed out the lack of increased demand after Thanksgiving Day. As a result, earnings of entertainment companies, including DIRECTV (NASDAQ:DTV), would get unfavorably impacted. The brokerage also slashed its outlook of the cable network advertising for the United States to 3% from 4% estimated by it previously. Jefferies also estimated higher headwind of foreign exchange transaction in the current year 2015.

Previous Performance

The company’s adjusted net income slipped 3.7% to $673 million in the third quarter from $699 million whereas earnings advanced 4% to $1.33 a share from $1.28 a share in the preceding year quarter.

DIRECTV (NASDAQ:DTV) delivered 6.2% growth in its top line to $8.37 billion in the September quarter from $7.88 billion in the previous year third quarter. The company disclosed then that it was able to wither the tough competitive environment for subscribers’ growth to record revenue uptick. The company ended the third quarter with cash and cash equivalents of $2.89 billion.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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