Discovery Communications Misses Where it Counts

Seth Jayson, The Motley Fool
Updated

Discovery Communications (NAS: DISCA) reported earnings on May 7. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended March 31 (Q1), Discovery Communications met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew. GAAP earnings per share expanded.


Gross margins dropped, operating margins dropped, net margins were steady.

Revenue details
 Discovery Communications reported revenue of $1.16 billion. The 22 analysts polled by S&P Capital IQ looked for revenue of $1.16 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.63. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.65 per share. GAAP EPS of $0.63 for Q1 were 11% higher than the prior-year quarter's $0.57 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 70.4%, 140 basis points worse than the prior-year quarter. Operating margin was 35.9%, 460 basis points worse than the prior-year quarter. Net margin was 20.0%, much about the same as the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $1.45 billion. On the bottom line, the average EPS estimate is $0.90.

Next year's average estimate for revenue is $5.49 billion. The average EPS estimate is $3.37.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 260 members out of 292 rating the stock outperform, and 32 members rating it underperform. Among 95 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 85 give Discovery Communications a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Discovery Communications is hold, with an average price target of $71.25.

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The article Discovery Communications Misses Where it Counts originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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