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Lions Gate (LGF.A) to Report Q4 Earnings: What's in Store?

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Lions Gate Entertainment Corp. (LGF.A - Free Report) is set to report fiscal fourth-quarter 2018 results on May 24.

Lions Gate’s adjusted earnings came in at 48 cents per share compared with the year-ago earnings of 20 cents. Earnings also surpassed the Zacks Consensus Estimate of 41 cents.

Notably, the company beat estimates in three of the trailing four quarters, delivering an average positive surprise of 63.13%.

On the revenue front, Lions Gate witnessed a surge of 51.9% year over year to approximately $1.14 billion.

Let's see how things are shaping up for this announcement.

Key Factors

Lions Gate Media Networks’ segment, formed after the acquisition of Starz, continues to drive its top line on the back of strong growth in over-the-top (OTT) and international digital media licensing arrangements. The Zacks Consensus Estimate for the Media Segment is currently pegged at $375 million. In the year-ago quarter, segment revenues amounted to $370.8 million.

The addition of Starz is also aiding the company to emerge as a major player in the TV space and helping it regain lost ground in the streaming network.

In the soon-to-be reported quarter, Starz and Altice USA signed a new multi-year affiliation agreement, which gives the latter broader access to Starz programming on video-on-demand and authenticated streaming platforms. This is expected to boost Starz subscriber base.

For the fourth quarter, the Zacks Consensus Estimate for Television Production revenues stands at $272 million, up 12% from the figure reported in the year-ago quarter.

However, fewer movie slates in fiscal 2018 compared with the previous year is anticipated to hurt Motion Pictures revenue performance. The segment is likely to face tougher year-over-year comparisons as the company benefited immensely on account of robust performance of La La Land, winner of six Academy Awards, John Wick: Chapter Two, and The Shack, in the year-ago period.

The Zacks Consensus Estimate for the Motion Pictures Segment is currently pegged at $415 million, indicating a decline of 36.5% from the figure reported in the prior-year quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Lions Gate has a Zacks Rank #3 and its Earnings ESP is 0.00%, which makes surprise prediction difficult.

Stocks With a Favorable Combination

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming release.

NetApp, Inc. (NTAP - Free Report) has an Earnings ESP of +2.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

DXC Technology Company. (DXC - Free Report) has an Earnings ESP of +1.06% and a Zacks Rank #2.

Nutanix Inc. (NTNX - Free Report) has an Earnings ESP of +2.98% and a Zacks Rank #3.

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