Discovery (DISCA) to report third quarter results: what’s in store?

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Discovery DISCA is expected to release its third quarter 2021 results on November 3.
For the quarter, Zacks’ consensus estimate for earnings has held steady at 20 cents per share for the past 30 days. The figure indicates a decrease of 75.3% from the figure released a year ago.
The consensus mark in revenue, set at $ 3.16 billion, implies a 23.3% increase from the figure released a year ago.
Notably, the company’s earnings have exceeded Zacks’ consensus estimate in three of the past four quarters, missing the same in the last, with the average earnings surprise being 2.8%.

– Zack

Let’s see how things went for this announcement.

Factors to consider

Discovery’s performance in Q3 2021 is expected to have benefited from an improved ad spend environment. The company derives more than 50% of its revenue from advertising.
Discovery boasts of a strong portfolio of non-fiction content. The increasing availability of its content on linear over-the-top digital platforms like Hulu and Sling TV should have improved traffic. The high demand for unscripted content should have helped Dplay.
The company is expected to have enjoyed a strong following from several channels including Discovery Channel, Animal Planet, Food Network, HGTV, MotorTrend, Science, TLC, ID, Oprah, Eurosport, Cooking Channel and UKTV Lifestyle.
The recovery in sporting events globally is expected to have boosted the growth of Eurosport, which was renamed Discovery Sports Events in the quarter to be published.
In addition, Discovery + is off to an impressive start. Discovery + ended the second quarter with 17 million direct-to-consumer paid subscribers. The availability of Discovery + on Comcast Xfinity and Amazon Prime video channels in the US, Starzplay in the MENA region, and Samsung smart TVs and Amazon Fire TV devices in the UK and Ireland are expected to have contributed to the revenue growth. ‘business.
International revenues were likely boosted by the improving environment for ad spending, particularly in the UK, Italy, Germany and Poland. The launch of Discovery + in the UK for Vodafone’s mobile market is expected to have contributed to the growth in subscriber numbers.
However, additional spending on direct-to-consumer initiatives (marketing and content costs) is expected to have hurt profitability in the third quarter.

What our model says

Depending on the Zacks model, the combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy), or 3 (hold) ranking increases the odds of beating the winnings.
Discovery has a revenue ESP of + 42.50% and currently carries a Zacks # 3 rank. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.

Other actions to consider

Here are a few companies that you might want to consider, as our model shows that they too have the right mix of elements to show a pace of earnings in their next releases:
AMC Entertainment AMC has an ESP on earnings of + 6.69% and a Zacks Rank # 2. You can see the full list of today’s Zacks # 1 stocks here.
Fox FOXA has + 6.18% Revenue ESP and Zacks # 2 rank.
Wesco International WCC has a revenue ESP of + 7.87% and a Zacks # 2 rank.

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