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Discovery (DISCA) to Report Q3 Earnings: What's in Store?

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Discovery is set to report third-quarter 2021 results on Nov 3.

For the quarter, the Zacks Consensus Estimate for earnings has been steady at 20 cents per share over the past 30 days. The figure indicates a 75.3% decline from the year-ago reported figure.

The consensus mark for revenues, pegged at $3.16 billion, implies 23.3% increase from the year-ago reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same in the remaining one, the average earnings surprise being 2.8%.
 

Discovery, Inc. Price and EPS Surprise

Discovery, Inc. Price and EPS Surprise

Discovery, Inc. price-eps-surprise | Discovery, Inc. Quote

 

Let’s see how things have shaped up for this announcement.

Factors to Consider

Discovery’s third-quarter 2021 performance is expected to have benefited from an improved ad-spending environment. The company generates more than 50% of its revenues from advertising.

Discovery boasts of a strong non-fiction content portfolio. The increasing availability of its content across linear, digital over-the-top platforms like Hulu and Sling TV is expected to have improved traffic. Strong demand for unscripted content is expected to have aided Dplay.

The company is expected to have benefited from solid viewership of multiple channels, including Discovery Channel, Animal Planet, Food Network, HGTV, MotorTrend, Science, TLC, ID, Oprah, Eurosport, the Cooking Channel and UKTV Lifestyle.

Resumption of sporting events globally is expected to have boosted growth for Eurosport, which was renamed as Discovery Sports Events during the to-be-reported quarter.

Moreover, Discovery+ is off to an impressive start. Discovery+ ended the second quarter with 17 million paying direct-to-consumer subscribers. Availability of Discovery+ on Comcast Xfinity and Amazon Prime Video Channels in the United States, Starzplay in MENA, and Samsung Smart TVs and Amazon Fire TV devices in the United Kingdom and Ireland is expected to have aided top-line growth.

International revenues are likely to have been boosted from improving ad-spending environment, particularly in the U.K., Italy, Germany and Poland. Launch of Discovery+ in the United Kingdom for Vodafone’s mobile market is expected to have aided subscriber growth.

However, incremental spending on direct-to-consumer initiatives (marketing and content costs) is expected to have hurt profitability in the third quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Discovery has an Earnings ESP of +42.50% and carries a Zacks Rank #3, currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases:

AMC Entertainment (AMC - Free Report) has an Earnings ESP of +6.69% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Fox (FOXA - Free Report) has an Earnings ESP of +6.18% and a Zacks Rank #2.

Wesco International (WCC - Free Report) has an Earnings ESP of +7.87% and a Zacks Rank #2.

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