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Discovery (DISCA) Q1 Earnings Miss Estimates, Revenues Up Y/Y

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Discovery (DISCA - Free Report) reported first-quarter 2021 adjusted earnings of 21 cents per share, missing the Zacks Consensus Estimate by 65.6% and decreasing 61.8% year over year.

Revenues inched up 4.1% year over year to $2.79 billion and beat the consensus mark by 0.2%.

Top-Line Details

Advertising revenues climbed 0.9% year over year to $1.42 billion. Moreover, Distribution revenues increased 7.1% year over year to $1.31 billion. Other revenues were $67 million, up 15.5% from the year-ago quarter.

U.S. Networks (64.7% of revenues) revenues increased 2.8% on a year-over-year basis to $1.81 billion. Advertising revenues declined 4.5% while distribution revenues grew 12.4%.

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 2% lower on a year-over-year basis. Total portfolio subscribers declined 4% year over year.

International Networks revenues (35.4% of revenues) increased 6.9% year over year to $987 million. Advertising revenues were up 15.7%, while distribution revenues were down 0.2%.

Discovery ended the first quarter with 13 million paying direct-to-consumer subscribers. The company launched discovery+ on Comcast Xfinity and Amazon Prime Video Channels in the United States, Starzplay in MENA, and on Samsung Smart TVs and Amazon Fire TV devices in the United KIngdom and Ireland.

Operating Details

In the first quarter, selling, general and administrative (SG&A) expenses surged 62.9% from the year-ago quarter to $1.05 billion. This year-over-year growth was due to 13% increase in SG&A, resulting from higher marketing-related expenses and personnel costs to support discovery+.

Adjusted operating income before depreciation & amortization (“OIBDA”) decreased 24.8% from the year-ago quarter to $837 million. Excluding the foreign-exchange impact, OIBDA decreased 24%.

U.S. Networks adjusted OIBDA decreased 19% from the year-ago quarter to $823 million.

However, International Networks’ adjusted OIBDA declined 27.1% from the year-ago quarter to $151 million. Excluding the forex impact, adjusted OIBDA was down 21%.

GAAP operating income declined 49.2% year over year to $396 million.

Balance Sheet

As of Mar 31, 2021, cash & cash equivalents were $2 billion compared with $2.09 billion as of Dec 31, 2020.

Zacks Rank & Stocks to Consider

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

Fox (FOXA - Free Report) , Gaia (GAIA - Free Report) and DISH Corporation (DISH - Free Report) are some top-ranked stocks in the broader consumer & discretionary sector. While Fox sports a Zacks Rank #1 (Strong Buy), both Gaia and DISH carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DISH is set to report its quarterly results on Apr 29. Fox and Gaia are scheduled to report the same on May 3 and 6, respectively.


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