Liberty Media (FWONK) Reports First Quarter Loss, Highest Revenue Estimate

Liberty Media (FWONK) came out with a quarterly loss of $0.15 per share compared to the Zacks Consensus Estimate of a loss of $0.13. For comparison, a year ago the loss was $0.20 per share. These numbers have been adjusted for one-off items.

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

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

Liberty Media, which belongs to the Zacks Media Conglomerates industry, posted revenues of $360 million for the quarter ended March 2022, surpassing the Zacks Consensus Estimate by 23.47%. For comparison, revenues from a year ago were $180 million. The company has topped consensus revenue estimates 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.

Liberty Media shares are down about 3.8% year to date, compared with the S&P 500’s decline of -13%.

What’s next for Liberty Media?

Even though Liberty Media has outperformed the market this year, the question that comes to investors’ minds is: what’s next for the 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 the earnings release, the estimate revision trend for Liberty Media is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. 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 $0.10 on $670.95 million in revenues for the coming quarter and $0.18 on $2.43 billion in revenues for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, media conglomerates are currently in the top 38% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same industry, Walt Disney (DIS), has not yet released results for the quarter ending March 2022. The results are expected to be released on May 11.

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

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

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