Discovery Communications

Company Description

Discovery Communications, through its subsidiaries, provides creative, media management and network services to the media and entertainment industries. Its client base includes motion picture studios, independent producers, broadcast networks, and others.

Discovery is a global media and entertainment company that offers original and purchased programming in the United States and over 170 other countries with over 100 television networks.

Surprising Trend

On May 4 Discovery reported first-quarter results headlined by a 133% increase in earnings per share. Net income was $119 million, or 28 cents per share, more than double that of the first quarter last year, which came in at $34 million, 12 cents per share.

Revenues great $8 million to $817, driven by a 5% growth in domestic networks and a 23% increase in other areas. In addition, the company's adjusted OIBDA margin increased to 40%, up from 37% last year.

This was the Discovery's third consecutive surprise, beating the consensus by 5 cents. Over the past 3 quarter the company has beat the average estimate by 34%.

Estimates are Rising

Following the report all 11 covering analysts for 2009 raised estimates, which now average $1.26 for the year, up 9 cents. After 6 of the 8 analysts making projections for 2010 raised estimates the consensus grew to $1.48, up from $1.37.

If met, these forecasts would yield 20% year-over-year growth for 2009 and another 17% next year.

The Chart

Shares of DISCA have almost doubled throughout the course of 2009 and continue to set new 52-week highs. Take a look at the chart below.