Liberty Media (FWONK) Announces First Quarter Loss, Exceeds Earnings Estimates

Liberty Media (FWONK) posted a quarterly loss of $0.15 per share against Zacks’ consensus estimate of a loss of $0.13. That compares to a loss of $0.20 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of -15.38%. A quarter ago, this media and entertainment company was expected to post a profit of $0.17 per share when it actually produced a loss of $0.64, delivering a surprise of -476.47%.

In the past four quarters, the company has only exceeded consensus EPS estimates once.

Freedom Media, which is industry-owned Zacks Media Conglomerates, reported revenue of $360 million for the quarter ended March 2022, beating the Zacks consensus estimate of 23.47%. That compares to revenues of $180 million a year ago. The company has exceeded consensus revenue estimates four times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

Liberty Media shares have lost about 3.8% year-to-date against a -13% drop for the S&P 500.

What’s next for Liberty Media?

With Liberty Media outperforming the market so far this year, the question on investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable metric that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Before this publication of the results, the trend of the revisions of the estimates for Liberty Media: mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.10 on $670.95 million in revenue for the upcoming quarter and $0.18 on $2.43 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, media conglomerates currently make up 38% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock in the same sector, Walt Disney (DIS), has yet to report results for the quarter ending March 2022. Results are expected to be released on May 11.

This entertainment company is expected to post quarterly earnings of $1.20 per share in its next report, representing a year-over-year change of +51.9%. The consensus EPS estimate for the quarter has been revised down 1.8% in the last 30 days from the current level.

Walt Disney’s revenue is expected to be $20.25 billion, up 29.7% from the year-ago quarter.

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