Cablevision (CVC) Poised for Strong Earnings - Analyst Blog

Cablevision Systems Corporation CVC, a leading media and telecommunications company is set to announce its first-quarter 2014 financial numbers before the opening bell on May 8, 2014.

Why a Likely Positive Surprise?

Our proven model shows that Cablevision Systems is likely to beat earnings because it has the perfect combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +100%. This is because the Most Accurate estimate stands at 4 cents, whereas the Zacks Consensus Estimate is pegged at 2 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. 

Zacks Rank: Cablevision Systems currently has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimate. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

The combination of Cablevision Systems' Zacks Rank #3 and +100% ESP makes us reasonably confident in looking for a positive earnings beat on May 8.

What is Driving the Better-than-Expected Earnings?

We expect a healthy performance from Cablevision owing to improving video churn rate and addition of new services. The company should also reap benefits from its recent initiation of offering multi-tuner, multi-room DVR functionality for their broadband consumers. Recently, the company announced the addition of the cooking channel of Scripps Networks Interactive along with DIY Network to its Optimum TV lineup.

Management forecasted that adjusted operating cash flow is expected to grow in high-single digit to low-double digit percentage in the first quarter of 2014. For fiscal 2014 as well, the company expects moderate cash flow growth.

Other Stocks to Consider

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

BlackBerry Ltd. BBRY, with earnings ESP of +21.43% and a Zacks Rank #2 (Buy).

Constant Contact, Inc. CTCT, with earnings ESP of +20.0% and a Zacks Rank #2 (Buy).

AMC Networks Inc. AMCX, with earnings ESP of +0.89% and a Zacks Rank #3 (Hold).