Dolby Laboratories (DLB) Reports Next Week: Wall Street Expects Earnings Growth

AMC Networks (AMCX) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.86 per share. This compares to earnings of $1.85 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 5.81%. A quarter ago, it was expected that this owner of cable channels including AMC and IFC would post earnings of $1.38 per share when it actually produced earnings of $1.24, delivering a surprise of -10.14%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

AMC Networks, which belongs to the Zacks Broadcast Radio and Television industry, posted revenues of $599.61 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.29%. This compares to year-ago revenues of $636.95 million. The company has topped consensus revenue estimates three times over the last four quarters.

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

AMC Networks shares have lost about 55.6% since the beginning of the year versus the S&P 500's gain of 25.2%.

What's Next for AMC Networks?

While AMC Networks has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. 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 release, the estimate revisions trend for AMC Networks: unfavorable. 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 #5 (Strong Sell) for the stock. So, the shares are expected to underperform 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 coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.28 on $617.49 million in revenues for the coming quarter and $4.50 on $2.44 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Broadcast Radio and Television is currently in the bottom 37% of the 250 plus 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.

One other stock from the broader Zacks Consumer Discretionary sector, Dolby Laboratories (DLB), is yet to report results for the quarter ended September 2024. The results are expected to be released on November 19.

This creator and licensor of audio, video and voice technologies is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of +4.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Dolby Laboratories' revenues are expected to be $305.82 million, up 5.3% from the year-ago quarter.

Zacks Investment Research

GoPro (GPRO) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of a loss of $0.04. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 100%. A quarter ago, it was expected that this action video camera maker would post a loss of $0.25 per share when it actually produced a loss of $0.24, delivering a surprise of 4%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

GoPro, which belongs to the Zacks Audio Video Production industry, posted revenues of $258.9 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.56%. This compares to year-ago revenues of $294.3 million. The company has topped consensus revenue estimates three times over the last four quarters.

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

GoPro shares have lost about 58.5% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for GoPro?

While GoPro has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. 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 release, the estimate revisions trend for GoPro: 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. So, the shares are 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 coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.05 on $269.17 million in revenues for the coming quarter and -$0.42 on $865.76 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Audio Video Production is currently in the bottom 29% of the 250 plus 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.

Dolby Laboratories (DLB), another stock in the same industry, has yet to report results for the quarter ended September 2024. The results are expected to be released on November 19.

This creator and licensor of audio, video and voice technologies is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of +4.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Dolby Laboratories' revenues are expected to be $305.82 million, up 5.3% from the year-ago quarter.

Zacks Investment Research

Dolby Laboratories, Inc. DLB has launched a new suite of cloud video products and solutions designed for real-time interactive streaming. Available as standalone tools or integrated solutions, they offer superior live sports and entertainment experiences.

This launch follows Dolby’s recent acquisition of THEO Technologies, a leading provider of premium video streaming tools used by prominent sports, media and entertainment companies globally.

THEOads is an advanced ad insertion tool that enhances advertising quality, flexibility and targeting within THEOplayer. Using server-guided ad insertion (SGAI) functionality, THEOads can optimally leverage THEOplayer’s capabilities to deliver more personalized and less intrusive ads, boosting viewer engagement and ad revenues without disrupting the viewing experience.

Apart from THEOads, Dolby and THEO’s combined solutions include Dolby Millicast for ultra-low latency streaming, Dolby Hybrik for transcoding and THEO’s cross-platform playback and live streaming tools like THEOplayer and THEOlive. These cutting-edge solutions are trusted by major sports, streaming and iGaming brands, such as FanDuel, ITV, Las Vegas Sands, NASCAR and the NFL, to enhance their live streaming services.

The combined offerings from Dolby and THEO elevate live experiences to be more interactive, personalized and delivered with minimal latency. With the introduction of THEOads at IBC 2024, these experiences now include advertisements tailored to the dynamic nature of live content, Dolby highlighted.

Synergies From Acquisitions to Aid DLB’s Top-Line Expansion

Dolby acquired THEO Technologies in July 2024, worth $55 million, to expand its Dolby.io offerings. With THEO, the company plans to address the growing demand for designing customized experiences in sports and entertainment.

Also, DLB announced the buyout of GE Licensing from GE Aerospace for $429 million in an all-cash transaction in June 2024. GE Licensing, a leading innovator in patent licensing and management, is a subsidiary of GE Aerospace that designs, develops and produces jet engines, components and integrated systems for military, commercial and business aircraft.

With this acquisition, Dolby expects to bolster its intellectual property portfolio through the strategic integration between its existing licensing businesses and GE Licensing's portfolio of video codec technologies (HEVC and VVC). The deal, likely to close by the end of fiscal 2024, is anticipated to be accretive on a non-GAAP basis to operating margins and earnings per share in fiscal 2025.

Synergies from the deal are likely to drive top-line expansion. Apart from inorganic growth, Dolby’s performance is gaining from the increasing adoption of Dolby Atmos and Dolby Vision.

Dolby Laboratories Price and Consensus

Dolby Laboratories price-consensus-chart | Dolby Laboratories Quote

In the fiscal third quarter, the company made significant strides in expanding the availability of its Dolby Vision and Dolby Atmos technologies across major verticals of autos, TVs and mobile. In May 2024, Dolby joined forces with VIZIO to make Dolby Atmos reachable to an expanded customer base. It is offering multi-dimensional sound experiences to consumers at a minimal price of $99. In April 2024, it announced that it was making Dolby Vision and Dolby Atmos available to all premium theater exhibitors.

Lower unit shipments of audio devices and cinema products due to weak demand trends at the box office are negatively impacting the top-line growth. Owing to these factors and the dynamic market conditions, management expects full-year revenues to be down 1-2%.

DLB’s Zacks Rank & Stock Price Performance

DLB currently carries a Zacks Rank #3 (Hold). Shares of the company have lost 11.8% in the past year against the sub-industry's growth of 5%.