Discovery Tops Q1 Earnings Forecasts Despite Continued Cord-Cutting, Lower TV Ratings

Pricing and rate increases help, but company misses mark on revenue estimates

David Zaslav
Getty

Discovery, Inc. reported mixed financial results for the first quarter of 2020, though even a split on analyst estimates feels like a win in the coronavirus-changed landscape.

Wall Street had forecast earnings per share (EPS) of 84 cents on $2.72 billion in revenue, according to a consensus compiled by Yahoo Finance. Discovery reported an adjusted EPS of 87 cents on revenue of $2.683 billion.

All told, revenues decreased 1% from the comparable quarter last year. Net income of $377 million was down 2%.

On a per-share basis, the company’s earnings were up a few pennies from Q1 2019.

Stateside, advertising revenues were flat year over year. Higher pricing there offset lower TV ratings. Cord-cutting also impacted domestic revenue, but rate increases more than offset those declines.

Overseas, ad sales dropped 4%.

“The world is facing an unprecedented challenge and I want to express our profound gratitude to the medical workers and front-line responders who are risking their personal safety every day during this fight with COVID-19,” David Zaslav, president and CEO of Discovery, said in a prepared statement. “I am also enormously proud of Discovery’s employees who have pulled together and stepped up with resilience, heart and creativity. They continue to nourish our viewers at a time when our trusted brands and beloved personalities are a unique source of comfort and familiarity. As we navigate through the remainder of 2020, our priority remains on the well-being of our employees, clients, customers, and production partners. Furthermore, we will continue to focus on maintaining a healthy balance sheet with robust liquidity and investing in our businesses to position ourselves for long-term growth amid the changes in the pay-TV landscape.”

Discovery stock (DISCA) closed Monday at $21.24 per share. The regular U.S. stock markets trading day opens at 9:30 a.m. ET.

Zaslav (pictured above) and his senior executive team will hold a conference call at 8 a.m. ET to discuss the quarter in greater detail.

Comments