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Discovery's (DISCA) Q4 Earnings & Revenues Beat Estimates

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Discovery (DISCA - Free Report) reported fourth-quarter 2020 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate by 4.1% but decreasing 22.4% year over year.

Revenues inched up 0.4% year over year to $2.89 billion and beat the consensus mark by 2.1%.

Top-Line Details

Advertising revenues climbed 0.3% year over year to $1.60 billion. Moreover, Distribution revenues inched up 1.2% year over year to $1.22 billion. Other revenues were $65 million, down 11% from the year-ago quarter.

U.S. Networks (61.6% of revenues) revenues increased 1.5% on a year-over-year basis to $1.78 billion. Advertising revenues declined 0.3% while distribution revenues grew 5.3%.

Discovery, Inc. Price, Consensus and EPS Surprise

Discovery, Inc. Price, Consensus and EPS Surprise

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

Subscribers of Discovery’s fully distributed networks were 3% lower on a year-over-year basis. Total portfolio subscribers declined 5% year over year.

International Networks revenues (38.3% of revenues) slipped 1.3% year over year to $1.11 billion. Advertising revenues were up 1.5%, while distribution revenues were down 4%.

Notably, total share of viewing across the international portfolio in the fourth quarter increased 4% on average, with strong share growth in the United Kingdom, Spain and Portugal.

Operating Details

In the fourth quarter, selling, general and administrative (SG&A) expenses increased 2% from the year-ago quarter to $809 million. This year-over-year growth was due to 8% increase in International Network’s SG&A.

Adjusted operating income before depreciation & amortization (“OIBDA”) decreased 9.3% from the year-ago quarter to $1 billion. Excluding the foreign-exchange impact, OIBDA decreased 8%.

U.S. Networks adjusted OIBDA increased 2.3% from the year-ago quarter to $946 million.

However, International Networks’ adjusted OIBDA declined 37.8% from the year-ago quarter to $196 million. Excluding the forex impact, adjusted OIBDA was down 35%.

GAAP operating income declined 30.8% year over year to $488 million.

Balance Sheet

As of Dec 31, 2020, cash & cash equivalents were $2.09 billion compared with $1.89 billion as of Sep 30, 2020.

Discovery repurchased shares worth $213 million in the reported quarter. Currently, $1.4 billion of the $2-billion authorization remains as of Dec 31, 2020.

Zacks Rank & Stocks to Consider

Currently, Discovery carries a Zacks Rank #3 (Hold).

Crocs (CROX - Free Report) , TEGNA (TGNA - Free Report) and BJs Wholesale Club (BJ - Free Report) are some top-ranked stocks in the broader consumer & discretionary sector. While both TEGNA and Crocs sport a Zacks Rank #1 (Strong Buy), BJs Wholsale has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Crocs and TEGNA are set to report their quarterly results on Feb 23 and Mar 1, respectively. BJs Wholsale is scheduled to report the same on Mar 4.

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