HSN, Inc. Third Quarter Earnings Sneak Peek

HSN, Inc. (NASDAQ:HSNI) will unveil its latest earnings on Wednesday, October 31, 2012. HSN is an interactive multi-channel retailer offering retail experiences on TV, online, in catalogs and in retail and outlet stores.

HSN, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 49 cents per share, a rise of 19.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 45 cents. Between one and three months ago, the average estimate moved up. It has dropped from 50 cents during the last month. Analysts are projecting profit to rise by 22.1% compared to last year’s $2.54.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with net income of 61 cents per share against the mean estimate of 60 cents. In the prior quarter, the company reported profit of 40 cents.

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Stock Price Performance: Between August 1, 2012 and October 25, 2012, the stock price rose $8.07 (19.6%), from $41.15 to $49.22. The stock price saw one of its best stretches over the last year between July 6, 2012 and July 18, 2012, when shares rose for nine straight days, increasing 5.8% (+$2.36) over that span. It saw one of its worst periods between June 15, 2012 and June 25, 2012 when shares fell for seven straight days, dropping 7% (-$2.90) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 4.6% in revenue from the year-earlier quarter to $786 million.

A Look Back: In the second quarter, profit fell 3.8% to $30.7 million (53 cents a share) from $32 million (53 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 2.7% to $767.2 million from $746.9 million.

Key Stats:

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 63.4% in the third quarter of the last fiscal year, 12.7% in the fourth quarter of the last fiscal year and 29% in the first quarter before declining in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 6.1% in the third quarter of the last fiscal year, 4.3% in the fourth quarter of the last fiscal year and 3.2% in the first quarter before increasing again in the second quarter.

Analyst Ratings: There are four out of seven analysts surveyed (57.1%) rating HSN a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.01 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 2.34 in the first quarter to the last quarter driven in part by a decrease in current assets. Current assets decreased 11.6% to $762 million while liabilities rose by 3.1% to $379.3 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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