Discovery Communications Inc. Earnings: Earnings Higher Than Expected

S&P 500 (NYSE:SPY) component Discovery Communications Inc (NASDAQ:DISCA) reported net income above Wall Street’s expectations for the fourth quarter. Discovery Communications is a global media and entertainment company that offers programming across multiple distribution platforms in more than 170 other countries.

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Discovery Communications Inc Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Discovery Communications Inc rose to $336 million (86 cents per share) vs. $194 million (45 cents per share) in the same quarter a year earlier. This marks a rise of 75.9% from the year earlier quarter.

Revenue: Rose 10.5% to $1.12 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Discovery Communications Inc beat the mean analyst estimate of 69 cents per share. Analysts were expecting revenue of $1.11 billion.

Quoting Management: David Zaslav, Discovery’s President and Chief Executive Officer said, “Discovery’s strong 2011 results and operating momentum exemplify the power and universal appeal of our non-fiction programming, as well as the opportunities inherent in the global distribution platform Discovery has built over the last 27 years. Through our continued focus on creating high-quality programming and leveraging that content around the globe, as well as across a growing number of digital and consumer platforms, we were able to take additional share of a strong global advertising market, build new brands and create additional growth drivers across our portfolio. Heading into 2012 we remain focused on taking market share globally while delivering value to our shareholders through sustained financial results and capital returns.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 27.4% and in the second quarter, the figure rose more than twofold.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the third quarter, by 2 cents in the second quarter, and by 2 cents in the first quarter.

Gross margin shrank 0.7 percentage point to 70.6%. The contraction appeared to be driven by increased costs, which rose 13.4% from the year earlier quarter while revenue rose 10.5%.

Revenue has risen the past four quarters. Revenue increased 18.3% to $1.09 billion in the third quarter. The figure rose 10.8% in the second quarter from the year earlier and climbed 8.2% in the first quarter from the year-ago quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next quarter performance. Over the past month, the average estimate for the first quarter of the next fiscal year has gone up from 59 cents per share to 60 cents. The average estimate for the fiscal year has remained at $2.39 per share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com