Discovery (DISCA) Q2 Earnings Top Estimates, Revenues Rise Y/Y
Discovery DISCA reported second-quarter 2021 adjusted earnings of $1.01 per share, which beat the Zacks Consensus Estimate by 83.6% and increased 152.5% year over year.
Revenues increased 20.5% year over year to $3.06 billion and beat the consensus mark by 3.1%.
Discovery, Inc. Price, Consensus and EPS Surprise
Discovery, Inc. price-consensus-eps-surprise-chart | Discovery, Inc. Quote
Top-Line Details
Advertising revenues climbed 28.6% year over year to $1.63 billion. Moreover, Distribution revenues increased 11.7% year over year to $1.36 billion. Other revenues were $57 million, up 32.6% from the year-ago quarter.
U.S. Networks (64.4% of revenues) revenues increased 12.4% on a year-over-year basis to $1.97 billion. Advertising revenues increased 12.2%. Distribution revenues grew 12% primarily driven by the launch of discovery+ in January 2021 and increases in contractual affiliate rates.
Subscribers of Discovery’s fully distributed networks were 3% lower on a year-over-year basis. Total portfolio subscribers declined 7% year over year.
International Networks revenues (35.7% of revenues) increased 36.9% year over year to $1.09 billion. Advertising revenues were up 87.7% while distribution revenues increased 11.1%.
Discovery ended the second quarter with 17 million paying direct-to-consumer subscribers. For the second quarter, Discovery was the #1 most-watched pay-TV portfolio in the U.S. among key demographics and the #1 portfolio in all of television for average time spent viewing among women aged 25-54.
Additionally, HGTV and ID were the #1 and #2 cable networks respectively among women aged 25-54 in Total Day during the second quarter.
Operating Details
In the second quarter, selling, general and administrative (SG&A) expenses surged 49.9% from the year-ago quarter to $952 million.
Adjusted operating income before depreciation & amortization (“OIBDA”) decreased 0.9% from the year-ago quarter to $1.1 billion.
U.S. Networks adjusted OIBDA decreased 1.1% from the year-ago quarter to $1.05 billion. International Networks’ adjusted OIBDA increased 11.4% from the year-ago quarter to $215 million.
GAAP operating income increased 8.6% year over year to $779 million.
Balance Sheet
As of Jun 30, 2021, cash & cash equivalents were $2.8 billion compared with $2 billion as of Mar 31, 2021.
Zacks Rank & Stocks to Consider
Currently, Discovery carries a Zacks Rank #3 (Hold).
Entravision Communications Corporation EVC, Penn National Gaming, Inc. PENN and PlayAGS, Inc. AGS are some better-ranked stocks in the broader consumer & discretionary sector, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Entravision Communications, Penn Gaming and PlayAGS are each set to report quarterly results on Aug 5.
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