Discovery Communications Earnings: Here’s Why Investors are Not Excited Now

Discovery Communications, Inc. (NASDAQ:DISCA) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.73%.

Discovery Communications, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 7.89% to $0.82 in the quarter versus EPS of $0.76 in the year-earlier quarter.

Revenue: Rose 28.46% to $1.47 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Discovery Communications, Inc. reported adjusted EPS income of $0.82 per share. By that measure, the company missed the mean analyst estimate of $0.9. It missed the average revenue estimate of $1.48 billion.

Quoting Management: David Zaslav, Discovery’s President and Chief Executive Officer said, “Discovery’s strong operating and financial momentum continued during the second quarter as we further capitalized on the organic growth opportunities across our portfolio while beginning to take advantage of the benefits that our recent strategic acquisitions provide. Our sustained commitment to producing captivating content and the further expansion of global pay-tv markets combined to once again drive audience and revenue growth across our unique distribution platform. The consistent financial gains we are delivering, along with the strength of our balance sheet, enable us to return significant capital to our shareholders while thoughtfully investing in our diverse brands and platforms in order to further build additional long-term growth opportunities.”

Key Stats (on next page)…

Revenue increased 26.9% from $1.16 billion in the previous quarter. EPS increased 30.16% from $0.63 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.85 to a profit $0.83. For the current year, the average estimate has moved down from a profit of $3.38 to a profit of $3.35 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)