Silver Spring, MD-based Discovery Communications, Inc. reported strong results for the second quarter of 2016. The company’s second-quarter 2016 earnings (on an adjusted basis) of 71 cents per share were ahead of the Zacks Consensus Estimate of 61 cents. Earnings also improved over the year-ago figure by 44.9%.
Discovery reported revenues of $1,708 million, up 3% on a year-over-year basis. Revenues narrowly missed the Zacks Consensus estimate of $1,716 million. Foreign currency movements impacted results, excluding which the top line expanded 6% in the second quarter of 2016.
Quarterly Performance
Total Distribution revenue was $813 million, up 4.9% year over year. Total Advertising revenue stood at $813 million, down 0.1% year over year. Other revenues increased 26.2% to $82 million. Quarterly expenses (on a reported basis) increased 2.3% to $1,122 million in the reported quarter. Quarterly adjusted operating income before depreciation and amortization (OIBDA) increased 4% year over year to $706 million.
The company exited the quarter with cash and cash equivalents of $185 million and $7,809 million of debt outstanding (non-current portion) compared with $390 million and $7,616 million, respectively, at the end of 2015.
The company bought back shares worth $377 million in the reported quarter, including $91 million of repurchase being part of Advance/Newhouse Programming Partnership ("ANPP").The company’s outlook for 2016 is expected to be discussed in the second quarter earnings conference call.
Segmental Details
U.S. Networks
Total revenue came in at $873 million, up 7% year over year. Within this, Distribution revenues were up 8% year over year while Advertising revenues climbed 5% from the year-ago quarter. Meanwhile, other revenues rose 60% to $16 million. Adjusted OIBDA was up 10% year over year. Adjusted OIBDA margin stood at 62% in the reported quarter versus 61% a year ago.
International Networks
Total revenue came in at $790 million, down 1% year over year. Within this, Distribution revenues climbed 2% year over year while Advertising revenues fell 7%. Other revenues improved 31% year over year. Furthermore, adjusted OIBDA decreased 6% on a year-over-year basis. Adjusted OIBDA margin stood at 32%, compared with 33% in the prior-year quarter.
Education & Other
Total revenue at the segment was $46 million, up 15% year over year.
Zacks Rank & Key Picks
Discovery currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include CBS Corp (CBS), Liberty LiLAC Group (LBRDA) and MSG Networks Inc. (MSGN). Each of the companies carries a Zack Rank #2 (Buy).
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Discovery (DISCA) Beats Earnings, Misses Revenues in Q2
Silver Spring, MD-based Discovery Communications, Inc. reported strong results for the second quarter of 2016. The company’s second-quarter 2016 earnings (on an adjusted basis) of 71 cents per share were ahead of the Zacks Consensus Estimate of 61 cents. Earnings also improved over the year-ago figure by 44.9%.
Discovery reported revenues of $1,708 million, up 3% on a year-over-year basis. Revenues narrowly missed the Zacks Consensus estimate of $1,716 million. Foreign currency movements impacted results, excluding which the top line expanded 6% in the second quarter of 2016.
Quarterly Performance
Total Distribution revenue was $813 million, up 4.9% year over year. Total Advertising revenue stood at $813 million, down 0.1% year over year. Other revenues increased 26.2% to $82 million. Quarterly expenses (on a reported basis) increased 2.3% to $1,122 million in the reported quarter. Quarterly adjusted operating income before depreciation and amortization (OIBDA) increased 4% year over year to $706 million.
The company exited the quarter with cash and cash equivalents of $185 million and $7,809 million of debt outstanding (non-current portion) compared with $390 million and $7,616 million, respectively, at the end of 2015.
The company bought back shares worth $377 million in the reported quarter, including $91 million of repurchase being part of Advance/Newhouse Programming Partnership ("ANPP").The company’s outlook for 2016 is expected to be discussed in the second quarter earnings conference call.
Segmental Details
U.S. Networks
Total revenue came in at $873 million, up 7% year over year. Within this, Distribution revenues were up 8% year over year while Advertising revenues climbed 5% from the year-ago quarter. Meanwhile, other revenues rose 60% to $16 million. Adjusted OIBDA was up 10% year over year. Adjusted OIBDA margin stood at 62% in the reported quarter versus 61% a year ago.
International Networks
Total revenue came in at $790 million, down 1% year over year. Within this, Distribution revenues climbed 2% year over year while Advertising revenues fell 7%. Other revenues improved 31% year over year. Furthermore, adjusted OIBDA decreased 6% on a year-over-year basis. Adjusted OIBDA margin stood at 32%, compared with 33% in the prior-year quarter.
Education & Other
Total revenue at the segment was $46 million, up 15% year over year.
DISCOVERY COM-A Price, Consensus and EPS Surprise
DISCOVERY COM-A Price, Consensus and EPS Surprise | DISCOVERY COM-A Quote
Zacks Rank & Key Picks
Discovery currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include CBS Corp (CBS), Liberty LiLAC Group (LBRDA) and MSG Networks Inc. (MSGN). Each of the companies carries a Zack Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>