The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Discovery Communications missed slightly on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share shrank.
Gross margins expanded, operating margins dropped, net margins dropped.
Discovery Communications recorded revenue of $1.08 billion. The 25 analysts polled by S&P Capital IQ expected revenue of $1.10 billion on the same basis. GAAP reported sales were 1.7% lower than the prior-year quarter's $1.10 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.57. The 27 earnings estimates compiled by S&P Capital IQ forecast $0.63 per share. GAAP EPS of $0.55 for Q3 were 6.8% lower than the prior-year quarter's $0.59 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 72.5%, 70 basis points better than the prior-year quarter. Operating margin was 40.8%, 130 basis points worse than the prior-year quarter. Net margin was 19.1%, 250 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.22 billion. On the bottom line, the average EPS estimate is $0.82.
Next year's average estimate for revenue is $4.56 billion. The average EPS estimate is $2.78.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 245 members out of 273 rating the stock outperform, and 28 members rating it underperform. Among 85 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 79 give Discovery Communications a green thumbs-up, and six 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 $54.67.
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