Discovery Communications Earnings: Here’s Why the Stock is Falling Now

Discovery Communications, Inc. (NASDAQ:DISCA) delivered a profit and missed Wall Street’s expectations, AND met the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.13%.

Discovery Communications, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 7.02% to $0.61 in the quarter versus EPS of $0.86 in the year-earlier quarter.

Revenue: Rose 6.95% to $1.2 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Discovery Communications, Inc. reported adjusted EPS income of $0.61 per share. By that measure, the company missed the mean analyst estimate of $0.76. It met the average revenue estimate of $1.2 billion.

Quoting Management: David Zaslav, Discovery’s President and Chief Executive Officer said, “Discovery’s commitment to investing in our brands and developing new and diverse growth opportunities produced another year of strong operating momentum and financial results in 2012. The appeal of our content resulted in larger audiences across the globe, enabling us to deliver consistently healthy advertising growth both domestically and internationally, while we further leveraged our valuable programming across emerging distribution platforms worldwide. At the same time, the strength of our balance sheet allowed us to make several strategic investments that we believe further bolster our asset portfolio, while also returning over $1.3 billion to shareholders this year. We head into 2013 with significant momentum, having just delivered the highest fourth quarter domestic viewership in our history, and will continue to invest in strategic growth initiatives so that we can deliver sustained long-term financial results and shareholder value.”

Key Stats (on next page)…

Revenue increased 11.52% from $1.08 billion in the previous quarter. EPS increased 7.02% from $0.57 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 $0.7 to a profit $0.69. For the current year, the average estimate has moved down from a profit of $2.69 to a profit of $2.66 over the last ninety days.

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