Discovery Inc. (DISCA) delivered mixed fourth-quarter and full-year 2021 results characterized by a big earnings miss. Revenue came in above consensus estimates as the company achieved its operational, financial, and strategic objectives. DISCA shares fell 1.70% to close at $27.73 on February 24.
Discovery is a media company that offers content across distribution platforms. Its U.S. Network segment operates national television networks and websites.
Earnings
Fourth-quarter revenue increased 10% year-over-year to $3.19 billion, beating consensus estimates of $3.12 billion. The increase was driven by a 10% increase in international advertising revenue. U.S. advertising revenue in the quarter was up 5% as distribution revenues increased 17%. Full-year revenue was up 14% year-over-year to $12.19 billion.
Net income fell 86% year-over-year in the fourth quarter to $38 million as total OIBDA increased 13% year-over-year to $1.13 billion. The company posted Q4 diluted earnings per share (EPS) of $0.08, a drop from $0.42 delivered in the same quarter the previous year and worse than consensus estimates of $0.83. Full-year diluted EPS fell 15% to $1.54.
Discovery ended 2021 with 22 million direct-to-consumer subscribers, an increase of 2 million from the third quarter.
Stock Rating
Yesterday Barrington analyst James Goss reiterated a Buy rating on Discovery with a $35 price target, implying 26.22% upside potential to current levels.
Consensus among analysts is a Strong Buy based on 5 Buys and 1 Hold. The average Discovery price target of $44.40 implies 60.12% upside potential to current levels.
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