Technology

Media Stock Aug 5 Earnings Roster: DISCA, ROKU and More

Media companies’ second-quarter 2020 earnings are expected to have benefited from robust demand for online content and high-speed Internet service amid the coronavirus crisis.

Netflix NFLX beat its global subscriber addition target of 7.5 million in the second quarter of 2020, adding 10.09 million paid subscribers globally, which surged 273.7% year over year as more and more people were compelled to stay at home due to the coronavirus-triggered lockdown and social-isolation measures. (Read more: Netflix Q2 Earnings Miss, Shares Down on Weak Q3 View)

Moreover, soaring demand for broadband service benefited Comcast CMCSA and Charter Communications.

Comcast added 323K High-Speed Internet Customers to its profile in the second quarter while Charter gained 842K resident internet users.

Meanwhile, legacy media giants like AT&T T and Comcast continue to lose voice, video and Pay TV subscribers due to persistent cord-cutting and stiff competition from streaming services like Netflix, Hulu, HBO, Disney+, Apple TV+ and Amazon Prime.

In the second quarter, AT&T saw an attrition of 886K premium video customers. Comcast’s video customer net losses were 477K while total voice customer net losses were 158K.

Moreover, advertising revenues of media companies are expected to have been drained by lower ad demand due to coronavirus, partially offset by higher political ad spending.

Sneak Peek Into a Few Upcoming Releases

Investors interested in the media sector are eagerly awaiting the upcoming earnings releases of industry players, namely Roku ROKU, Discovery DISCA, Nexstar Media Group NXST and Sinclair Broadcast Group SBGI, which are set to report on Aug 5.

Roku's second-quarter 2020 results are likely to reflect gains from the popularity of its free, ad-supported platform, The Roku Channel, which is expected to have aided active accounts growth and attracted advertisers to the platform. Moreover, growth in streaming hours is expected to have boosted TV streaming advertising on Roku’s platform.

However, management indicated that advertising business witnessed cancellations attributed to marketing budget cuts by clients due to the impact of coronavirus outbreak on businesses. (Read more: Roku to Report Q2 Earnings: What's in the Cards?)

Nonetheless, this was partially offset by new marketing budgets moving to Roku from traditional TV given cancellation of high profile, live sporting and entertainment event during the to-be-reported quarter.

Moreover, Roku has the favorable combination of a Zacks Rank #3 (Hold) and an Earnings ESP of +34.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the Zacks Consensus Estimate for second-quarter loss has remained steady at 56 cents per share in the past 30 days.

Roku, Inc. Price and EPS Surprise

Roku, Inc. Price and EPS Surprise

Roku, Inc. price-eps-surprise | Roku, Inc. Quote

Discovery’s second-quarter 2020 performance is expected to have suffered from lower ad demand and spending due to the coronavirus outbreak. The company generates more than 55% of its revenues from advertising and the weakness is expected to have hurt Discovery’s top-line growth in to-be-reported quarter. (Read more: Discovery to Report Q2 Earnings: What's in Store?)

Additionally, cancellation of sporting events globally due to the pandemic is expected to have deterred growth for Eurosport, Discovery’s primary sports-oriented linear network. Moreover, late resumption of sporting events in Europe is expected to have hurt Dplay’s viewership.

Discovery has a Zacks Rank #4 (Sell) and an Earnings ESP of -7.04%.

Notably, the Zacks Consensus Estimate for second-quarter earnings has increased a penny to 71 cents per share over the past 30 days.

Discovery, Inc. Price and EPS Surprise

Discovery, Inc. Price and EPS Surprise

Discovery, Inc. price-eps-surprise | Discovery, Inc. Quote

Nexstar Media Group’s second-quarter results are expected to reflect increases in viewership on its channels as people were confined to their homes amid the coronavirus-led lockdowns. Local news programming also benefited as consumers sought more information regarding their communities.

The company’s strong position in the domestic market and accelerated political spending related to primary elections is expected to have aided top-line growth. However, cancellations in sports programming are expected to have deterred growth in advertising revenues.

The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Notably, the consensus mark for earnings has remained stable at $1.28 per share over the past 30 days.

Nexstar Media Group, Inc Price and EPS Surprise

Nexstar Media Group, Inc Price and EPS Surprise

Nexstar Media Group, Inc price-eps-surprise | Nexstar Media Group, Inc Quote

Sinclair Broadcast Group’s second-quarter results are expected to reflect coronavirus-related impacts to core advertising, subscriber counts, and sporting event cancellations and suspensions.

Growth in political advertising is expected to have been partially offset by the company’s dependence on live sports programming for advertising revenues, which is expected to have taken a hit in the to-be-reported quarter.

The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Notably, the consensus mark for earnings has remained stable at $4.83 per share over the past 30 days.

Sinclair Broadcast Group, Inc. Price and EPS Surprise

Sinclair Broadcast Group, Inc. Price and EPS Surprise

Sinclair Broadcast Group, Inc. price-eps-surprise | Sinclair Broadcast Group, Inc. Quote

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