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Cable One (CABO) To Report Q4 Earnings: What's In The Cards?

By Zacks Investment ResearchStock MarketsFeb 26, 2018 09:35PM ET
www.investing.com/analysis/cable-one-cabo-to-report-q4-earnings-whats-in-the-cards-200294593
Cable One (CABO) To Report Q4 Earnings: What's In The Cards?
By Zacks Investment Research   |  Feb 26, 2018 09:35PM ET
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Cable One (NYSE:CABO) is slated to report fourth-quarter 2017 results on Mar 1, before the opening bell.

The Zacks Consensus Estimate for revenues is pegged at $255.5 million, reflecting year-over-year growth of 23.6%. The consensus estimate for earnings is pegged at $5.87 per share, indicating year-over-year growth of 38.8%.

The company has a mixed earnings surprise history. Earnings outpaced the Zacks Consensus Estimate in two of the previous four quarters and lagged the same in the remaining two quarters, with an average beat of 2.60%.

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

Factors Likely to Influence Q4 Earnings

Based in Phoenix, AZ, Cable One is among the top 10 cable companies in the United States, serving more than 800,000 residential and commercial customers in 21 states with high-speed Internet, cable television and telephone service. As of Dec 31, 2016, it served 513,908 data customers, 320,246 video customers and 115,811 voice customers. The company provides consumers with a wide range of latest products and services, including wireless Internet service, high-definition programming and phone service with free, unlimited long-distance calling in continental United States.

Cable One continues to make major changes in its channels and their availability to customers. New lineups were implemented to make news, sports and other channels easily accessible to viewers.

We are also impressed with the company’s efforts to reward shareholders with a quarterly cash dividend of $1.75 per share. The dividend was paid on Dec 8, 2017 to stockholders of record at the closure of business on Nov 21, 2017. Notably, the company portrays an impressive record of dividend payouts.

As investors prefer an income generating stock, a high dividend-yielding one is obviously much coveted. Needless to say, investors are always on the lookout for companies with a track record of consistent and incremental dividend payments.

Over the past three months, shares of Cable One have increased 2.5% while the industry to which it belongs has gained 4.7%.

However, we are concerned about the company’s operation in a saturated and competitive multi-channel U.S. video market. Moreover, cable companies continue to face stiff competition from online video streaming service providers such as Netflix (NASDAQ:NFLX) , Hulu.com, YouTube etc. because of their cheap source of TV programming. Furthermore, gaining customers from competitors is a difficult task as most pay-TV operators are offering innovative packages.

Moreover, being a U.S. cable TV company, Cable One faces immense competition from leading cable multi-service-operators (MSO) like Comcast (NASDAQ:CMCSA) and Charter Communications (NASDAQ:CHTR) . This is likely to be a major dampener to the company’s earnings.

Earnings Whispers

Our proven model does not conclusively show that Cable One is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: Cable One has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $5.87. You can uncover the best stocks to buy or sell before they’re reported with the Earnings ESP Filter.

Zacks Rank: Cable One has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

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

Cable One, Inc. Price and EPS Surprise

Cable One, Inc. Price and EPS Surprise | Cable One, Inc. Quote

Stock to Consider

AMC Networks (NASDAQ:AMCX) from the Zacks Consumer Discretionary sector has the right combination of elements to post an earnings beat in its fourth-quarter 2017 results, scheduled to be released on Mar 1. The company has an Earnings ESP of +4.80% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters with an average beat of 21.9%.

Zacks Top 10 Stocks for 2018

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?

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Netflix, Inc. (NFLX): Free Stock Analysis Report

AMC Networks Inc. (AMCX): Free Stock Analysis Report

Comcast Corporation (CMCSA): Free Stock Analysis Report

Charter Communications, Inc. (CHTR): Free Stock Analysis Report

Cable One, Inc. (CABO): Free Stock Analysis Report

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Cable One (CABO) To Report Q4 Earnings: What's In The Cards?
 

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Cable One (CABO) To Report Q4 Earnings: What's In The Cards?

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