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Discovery (DISCA) to Report Q4 Earnings: What's in Store?

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Discovery DISCA is set to report fourth-quarter 2020 results on Feb 22.

For the quarter, the Zacks Consensus Estimate for earnings has increased by a penny to 72 cents per share over the past 30 days. The figure indicates 26.5% decline from the year-ago reported figure.

The consensus mark for revenues, pegged at $2.83 billion, implies a 1.7% decline 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 surprise being 6.51%.

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 are shaping up for this announcement.

Factors to Consider

Discovery’s fourth-quarter 2020 results are expected to have benefited from an improved ad-spending environment. The company generates more than 51.2% of its revenues from advertising. Sequential recovery is expected to have aided Discovery’s top-line growth in the to-be-reported quarter.

Discovery’s top line is likely to have benefited from a strong content portfolio. Moreover, resumption of sporting events globally is expected to have boosted growth for Eurosport, Discovery’s primary sports-oriented linear network.

Moreover, renewals with the likes of Mediacom, NCTC, Comcast, Charter and Cox are expected to have driven top-line growth despite disruptions caused by the coronavirus outbreak.

However, the bottom-line performance is likely to reflect incremental spending on direct-to-consumer initiatives and International growth efforts during the to-be-reported 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 +3.47% and a Zacks Rank #3. 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 some other companies worth considering as per our model, these too have the right combination of elements to beat on earnings this reporting cycle:

CrowdStrike Holdings (CRWD - Free Report) has an Earnings ESP of +2.45% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

3D Systems (DDD - Free Report) has an Earnings ESP of +29.63% and is #2 Ranked.

Churchill Downs (CHDN - Free Report) has an Earnings ESP of +158.07% and a Zacks Rank #2.

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