Discovery Communications, Inc.
) is slated to report its fourth-quarter 2013 financial results
before the opening bell on Feb 13, 2014.
In the last quarter, the company delivered a 9.59% positive
earnings surprise. Let's see whether the situation has changed in
the fourth quarter.
Factors to Be Considered This Quarter
Discovery is a pure-play non-fiction TV content developer. The
non-fiction media market is highly competitive and as a leading
player of this segment, Discovery faces fierce competition.
The company's national TV networks compete with other
broadcast and national TV networks as well as with home video
products and Internet usage for viewers. The company is highly
susceptible to changes in distribution and viewing of TV
Discovery is suffering from customer concentration risks. In
the U.S., the top 10 distributors accounted for nearly 90% of the
company's total distribution revenue. Similarly, in international
markets, the top 10 distributors generate more than 50% of the
company's distribution revenues. Loss of any of these
distributors will have significant material impact on the
Our proven model does not conclusively show that Discovery
Communications is likely to beat the Zacks Consensus Estimate
this quarter. This is because a stock needs to have both a
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to
happen. Unfortunately, this is not the case here as elaborated
Positive Zacks ESP:
Earnings ESP represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate. This leads to an ESP
of +1.14% for Discovery Communications as the Most Accurate
estimate stands at $0.89 while the Zacks Consensus Estimate is
lower at $0.88.
Zacks Rank #4 (Sell):
Discovery Communications' Zacks Rank #4, decreases the predictive
power of ESP.
We caution investors against the stock going into the earnings
announcement, as a Zacks earnings ESP of +1.14% combined with a
Zacks Rank #4 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some companies to consider as our model shows these
have the right combination of elements to post an earnings beat
AMC Networks Inc.
) has earnings ESP of +5.2% and carries a Zacks Rank #3
) has earnings ESP of +6.34% and carries a Zacks Rank #1 (Strong
Akamai Technologies, Inc.
) has earnings ESP of +7.32% and carries a Zacks Rank #1.
AKAMAI TECH (AKAM): Free Stock Analysis
AMC NETWORKS- A (AMCX): Free Stock Analysis
BAIDU INC (BIDU): Free Stock Analysis Report
DISCOVERY COM-A (DISCA): Free Stock Analysis
To read this article on Zacks.com click here.