Sphere Entertainment (SPHR) reports Q3 loss, beats revenue estimates (adjusted)

Sphere Entertainment SPHR reported quarterly loss of $1.08 per share versus the Zacks Consensus Estimate of a loss of $0.96. For comparison, a year earlier the loss was $0.29 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -12.50%. A quarter ago, it was expected that this company would post earnings of $1.17 per share when in fact it produced earnings of $2.25, delivering a surprise of 92.31%.

Over the last four quarters, the company has topped consensus EPS estimates only once.

Sphere Entertainment, which belongs to the Zacks Media Conglomerates industry, posted revenues of $363.3 million for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 160.80%. This compares to revenues of $460.13 million in the prior year. The company has surpassed the consensus revenue estimate four times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

Sphere Entertainment shares have lost about 33.8% since the beginning of the year compared to the S&P 500’s gain of 7.3%.

What’s next for Sphere Entertainment?

While Sphere Entertainment has underperformed the market this year, investors are wondering: what’s next for this stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for Sphere Entertainment is mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.13 on $162.5 million in revenue for the coming quarter and -$6.71 on $573 million in revenue for the current fiscal year.

Investors should be aware that the outlook for an industry can also have a significant impact on stock prices. In terms of the Zacks Industry Rank, media conglomerates currently rank in the top 44% of the 250+ Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company from the broader Zacks Consumer Discretionary sector, Guess (GES), has not yet reported its results for the quarter ended April 2023.

The clothing company is expected to report a quarterly loss of $0.28 per share in its upcoming report, which would represent a year-over-year change of -216.7%. The consensus earnings per share estimate for the quarter has been revised down by 0.5% over the past 30 days to the current level.

Guess revenue is expected to be $555.46 million, down 6.4% from the same quarter last year.

(We are republishing this article to correct an error. The original article, published on May 10, 2023, should no longer be used.)

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