Factors Setting the Tone for Discovery's (DISCA) Q4 Earnings
Discovery DISCA is scheduled to report fourth-quarter 2018 results on Feb 26.
In the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate on two occasions, delivering average positive surprise of 0.2%.
In the last reported quarter, Discovery reported earnings of 52 cents per share that lagged the Zacks Consensus Estimate by a dime. Revenues surged 57% year over year to $2.59 billion.
The Zacks Consensus Estimate for fourth-quarter earnings has remained unchanged at 81 cents over the past seven days, reflecting year-over-year growth of 72.3%. The consensus mark for revenues currently stands at $2.86 billion, reflecting year-over-year growth of 53.3%.
Discovery, Inc. Price and EPS Surprise
Discovery, Inc. Price and EPS Surprise | Discovery, Inc. Quote
Let’s see how things are shaping up for this announcement.
Portfolio Strength & Partnerships to Boost Top-Line Growth
Discovery is benefiting from content portfolio strength, post the Scripps Networks’ buyout. The company also expands international footprint, especially in regions like Europe, Latin America and the Nordics.
Furthermore, expanding sports coverage based on partnership with the likes of PGA TOUR is a key catalyst.
During the quarter, the company extended its Golf coverage. In October, the company entered a 12-year agreement with PGA Tour worth about $2 billion to manage TV and digital rights for golf events in territories outside the United States.
Moreover, GOLFTV announced an exclusive multi-year partnership with Tiger Woods, late November. Additionally, GOLFTV inked a partnership with the European Tour to broadcast and stream a number of golf events.
Apart from GOLFTV, Discovery’s European sports network, EuroSport won European multi-platform broadcast and distribution rights for four Olympic Games between 2018 and 2024. Additionally, the platform has rights to prominent pro leagues in soccer and tennis, among others.
Apart from PGA and European Tour, partnerships with the likes of AT&T T, Hulu, Sling TV and Bilibili are helping Discovery rapidly penetrate the online viewing market. The company inked a joint venture with The Enthusiast Network (TEN) for automotive media, which marks Discovery’s entry into the direct-to-consumer offerings space.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Discovery currently has a Zacks Rank #3 and an Earnings ESP of +4.72%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are three other stocks you may want to consider as our model shows these too have the right combination of elements to deliver an earnings beat in the to-be-reported quarter.
PlayAGS AGS has an Earnings ESP of +42.86% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clarus Corporation CLAR has an Earnings ESP of +7.69% and a Zacks Rank #1.
Live Nation Entertainment LYV has an Earnings ESP of +3.77% and a Zacks Rank #1.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AT&T Inc. (T) : Free Stock Analysis Report
Live Nation Entertainment, Inc. (LYV) : Free Stock Analysis Report
Discovery, Inc. (DISCA) : Free Stock Analysis Report
PlayAGS, Inc. (AGS) : Free Stock Analysis Report
Clarus Corporation (CLAR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
