Financial Reports are Key to Consider: Discovery Inc (NASDAQ: DISCK)

On Tuesday, Shares of Discovery Inc (NASDAQ: DISCK) rose 1.48% to $26.14. The stock recorded $25.48 as its minimum price and hit the max level of $26.20, during its most recent trading session. It traded total volume of 1.83M shares lower than the average volume of 4.14M shares.

Discovery, Inc. (NASDAQ: DISCA, DISCB, DISCK) recently stated financial results for the first quarter ended March 31, 2018.

First Quarter Results

First quarter 2018 revenues of $2,307.0M increased 43% on a stated basis contrast with the prior year quarter. Excluding the impact of foreign currency transactions and the Scripps Networks Interactive (“Scripps”), The Enthusiast Network (“VTEN”) and the Oprah Winfrey Network (“OWN”) transactions (collectively, “the Transactions”)(1), revenues increased 14%, as International Networks grew 28% and U.S. Networks grew 3%. On a Pro Forma(2) basis, excluding the impact of foreign currency fluctuations, total company first quarter revenues grew 10%, as International Networks grew 26% and U.S. Networks grew 2%.

First quarter Adjusted Operating Income Before Depreciation and Amortization (“Adjusted OIBDA”) increased 16% to $697.0M on a stated basis, and excluding the impact of the Transactions and foreign currency fluctuations, Adjusted OIBDA reduced 9%, as 3% growth at U.S. Networks was more than offset by a 37% decline at International Networks, mainly because of the timing of costs associated with the Olympics. On a Pro Forma basis, excluding the impact of foreign currency, total company first quarter Adjusted OIBDA declined 6%, as U.S. Networks’ Adjusted OIBDA grew 1% and International Networks reduced 30%, mainly because of the timing of costs associated with the Olympics.

First quarter net income available to Discovery, Inc. (“DCI Net Income”) reduced to a loss of $8.0M contrast with $215.0M in the prior year quarter mainly because of lower operating results, higher restructuring charges, other transaction costs associated with the acquisition of Scripps and higher interest expense, which were partially offset by a tax benefit in the first quarter of 2018 as compared to an expense in the prior year and the debt extinguishment charge last year. Diluted earnings per share reduced to $(0.01) because of lower DCI Net Income. Adjusted Earnings per Diluted Share (“Adjusted EPS”), which excludes the impact of amortization of acquisition-related intangible assets, net of tax was $0.16. Adjusted EPS excluding restructuring costs and other Scripps related transaction costs, mainly legal and financial fees from legacy Scripps, was $0.53, and included $226.0M (or $0.37 per share) of after-tax restructuring costs and other transaction costs.

Free cash flow reduced to $112.0M for the first quarter of 2018 as cash flow from operations reduced to $160.0M while capital expenditures of $48.0M were relatively consistent with the prior year. First quarter cash flow from operations reduced mainly because of higher interest payments as well as transaction and integration costs associated with the acquisition of Scripps.

DISCK has the shares float of 375.20M and its EPS growth ratio for the next five years was 16.00%. The average true range (14) of the Company was 0.74 while its previous closing price stands at $25.76. Price to book ratio was 1.78 while 82.18% of the stock was owned by institutional investors.

Marion Frost

Marion Frost

I am Marion Frost and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.