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Leisure Stocks Q3 Earnings Roster for Oct 25: WYN, LVS & SIX

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The Q3 earnings season is gaining pace with 87 S&P 500 having posted quarterly numbers as of Oct 20, per the latest Earnings Preview.

Total earnings reported by these companies are up 9.4% from the year-ago period, courtesy a 7.3% rise in revenues. While, 71.3% of the companies surpassed earnings estimates, 70.1% exceeded top-line expectations.

Coming to the Zacks Consumer Discretionary sector, only a handful of stocks from the space have reported their quarterly numbers so far this season. Markedly, the results so far have not been too enticing. Total earnings declined 1.7% from the year-ago period while revenues improved only 2.9%.

Nevertheless, leisure stocks from the sector mostly perform well during the spring and summer seasons and thus the sector’s performance is expected to depict a better picture as more companies report their financial numbers.

Among the leisure stocks that have already reported, Pool Corporation (POOL - Free Report) and International Speedway Corporation have delivered strong results with their bottom line and top line beating the Zacks Consensus Estimate.

Let’s take a look at what might be in store for the three leisure stocks that are set to report their third-quarter 2017 results on Oct 25. Will they manage to put up a decent performance?

Wyndham Worldwide Corporation pulled off a positive earnings surprise of 2% in the last quarter. In fact, the company’s bottom line surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 2.41%.

However, our proven model does not conclusively show earnings beat for Wyndham this quarter. This is because, a company needs to have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase its odds of an earnings surprise.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

For the quarter, the company has an Earnings ESP of -0.75% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wyndham Worldwide Corp Price and EPS Surprise

The Zacks Consensus Estimate for net revenue in Wyndham’s Vacation Ownership segment is currently pegged at $791 million, reflecting an increase of more than 6% year over year.

However, its new owner strategy is expected to weigh on its near-term EBITDA. Currently, the Zacks Consensus Estimate for EBITDA in this segment is pegged at $192 million, reflecting a modest rise of less than 2% year over year.

Yet, certain headwinds persist in the form of lingering uncertainty in various economies, soft demand in oil producing regions, concerns related to the Zika virus and negative currency translation.

Nevertheless, we expect the company’s diversified product portfolio, prudent acquisitions and robust marketing efforts to continue driving the bottom line in the quarter. The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $2.01, reflecting an increase of 6.1% over the prior-year quarter. Also, the quarter’s revenues are expected to grow 6% year over year to $1.67 billion (read more: What Should You Expect From Wyndham in Q3 Earnings?).

Las Vegas Sands Corp. (LVS - Free Report) surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 10.88%. We expect the company to top expectations in the to-be-reported quarter as well, owing to the combination of its Zacks Rank #3 and Earnings ESP of +3.73%.

Las Vegas Sands Corp. Price and EPS Surprise

In fact, the company’s Macao operation is set to experience strong growth in both the VIP segment and mass gaming revenues in the third quarter, given the improved operating environment there.

However, stringent capital controls by the Chinese government, increased audits of the junket industry and an excess supply in the Macao market is likely to weigh Las Vegas Sands’ results.

In the meantime, the company’s focus on renovation and promotion of its Las Vegas properties are likely to result in high occupancy rates, besides driving segmental performance. The Zacks Consensus Estimate for Las Vegas Operations’ revenues is pegged at $400 million, reflecting an increase of 4.2%, on a sequential basis.

Overall, the Zacks Consensus Estimate for Las Vegas’total quarterly revenues of $3.12 billion reflects year-over-year growth of 5.1%. Conversely, the same for current-quarter earnings of 67 cents reflects a year-over-year decline of nearly 7%. (You can read more here: Will Macao Revival Drive Las Vegas Sands' Q3 Earnings?)

Six Flags Entertainment Corporation witnessed a negative earnings surprise of 15.71% in the last quarter. Moreover, the trailing four-quarter average earnings miss is 14.76%.

Six Flags Entertainment Corporation New Price and EPS Surprise

Also, our quantitative model predicts that Six Flags Entertainment is unlikely to post a beat in the to-be-reported quarter due to the combination of its Zacks Rank #4(Sell) and Earnings ESP of -0.31%.

As it is we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Markedly, the Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.91 per share, reflecting a rise of 66% year over year. Meanwhile, the same for the quarter’s revenues of $587.4 million reflects year-over-year growth of 5.4%.

Stay tuned! Check back on our full write-up on earnings releases of these stocks.

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