Discovery (DISCA) Q4 Earnings Miss Estimates, Revenues Up Y/Y

Discovery DISCA reported fourth-quarter 2021 earnings of 8 cents per share, which declined 81% year over year.

Revenues increased 10.4% year over year to $3.187 billion, which missed the Zacks Consensus Estimate by 1.8%.

The consensus mark for earnings was pegged at 89 cents per share.

Discovery, Inc. Price, Consensus and EPS Surprise

Discovery, Inc. price-consensus-eps-surprise-chart | Discovery, Inc. Quote

Top-Line Details

Advertising revenues increased 6.4% year over year to $1.71 billion. Distribution revenues increased 10.9% year over year to $1.35 billion. Other revenues were $130 million compared with $65 million reported in the year-ago quarter.

U.S. Networks (63.5% of revenues) revenues increased 13.9% on a year-over-year basis to $2.03 billion. Advertising revenues increased 4.8%, while distribution revenues rose 17.3%.

Subscribers of Discovery’s fully-distributed networks were 4% lower on a year-over-year basis. Total portfolio subscribers declined 5% year over year.

International Networks revenues (36.5% of revenues) increased 5.3% year over year to $1.16 billion. Advertising revenues and distribution revenues were up 9.6% and 2%, respectively.

Discovery ended the fourth quarter with 22 million paying direct-to-consumer subscribers.

Operating Details

In the fourth quarter, selling, general and administrative (SG&A) expenses surged 32.1% from the year-ago quarter’s levels to $1.069 billion.

Adjusted operating income before depreciation & amortization (“OIBDA”) declined 13.5% from the year-ago quarter’s levels to $1.137 billion.

U.S. Networks adjusted OIBDA increased 16.7% from the year-ago quarter’s levels to $1.104 billion. However, International Networks’ adjusted OIBDA rose 5.6% year over year to $207 million.

GAAP operating income increased 4.1% year over year to $508 million.

Balance Sheet

As of Dec 31, 2021, cash & cash equivalents were $3.91 billion compared with $3.12 billion as of Sep 30, 2021.

Zacks Rank & Stocks to Consider

Currently, Discovery carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Consumer Discretionary sector are PlayAGS AGS, Accel Entertainment ACEL and Gildan Activewear GIL, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PlayAGS is set to announce fourth-quarter 2021 results on Mar 10.

AGS is up 0.7% in the past year against the Zacks Gaming industry’s decline of 34.4% and the Consumer Discretionary sector’s fall of 24.5% in the past year.

Accel Entertainment is set to announce fourth-quarter 2021 results on Mar 15.

ACEL is up 21.9% in the past year against the Zacks Gaming industry’s decline of 34.4% and the Consumer Discretionary sector’s fall of 24.5%.

Gildan Activewear is set to announce fourth-quarter 2021 results on Feb 23.

GIL is up 27.3% in the past year against the Zacks Textile – Apparel industry’s decline of 11% and the Consumer Discretionary sector’s fall of 24.4%.

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