Discovery Q3 Profit Rises 15% Despite Declines in Ad Sales, Total Revenue

Parent to HGTV, Food Network and Discovery Channel tops Wall Street’s expectations in summer quarter

Discovery, Inc. impressed with its third-quarter 2020 financials — especially considering the environment.

Wall Street had forecast earnings of 65 cents per share on $2.49 billion in revenue, according to a Yahoo Finance compilation of estimates. On Thursday, Discovery reported adjusted EPS (earnings per share) of 81 cents on $2.561 billion in revenue.

Net income was $300 million, up 15% from the comparable quarter last year. On a per-share basis, adjusted earnings decreased 7%.

Total revenues were down 4%, however, as ad sales decreased more than U.S. distribution rose.

David Zaslav, president and CEO of Discovery said: “Discovery delivered improving financial results in the third quarter, a testament to the powerful appeal of our content and brands, led in the U.S. by TLC, which beat top-rated sports and news networks in coveted Primetime demos, even in a record year for cable news. And as promised, our healthy liquidity position and another robust quarter of free cash flow generation allowed us to return $228 million to shareholders through share repurchases. In the midst of macroeconomic uncertainty with the ongoing COVID pandemic, as well as the continuing evolution of our industry, we remain focused on positioning Discovery for long-term growth and shareholder value creation through the execution of our strategic priorities, including our next generation initiatives.”

Discovery stock (DISCA) closed Wednesday at $20.53 per share. The stock markets reopen for regular trading at 9:30 a.m. ET.

Discovery executives will host a conference call at 8 a.m. ET to discuss the quarter in greater detail.

More to come…

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