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Discovery Tops Q4 Earnings Forecasts, Sees Solid Streaming Service Gains

CEO David Zaslav said discovery+, the streaming service launched in earlier this year, should top 12 million subscribers by the end of the month.

Discovery Inc.  (DISCA) - Get Warner Bros Discovery Inc Com Ser A Report posted stronger-than-expected fourth quarter earnings Monday and noted a stronger-than-expected take-up of its newly launched streaming service. 

Discovery said adjusted earnings for the three months ending in December were pegged at 76 cents per share, down 22.5% from the same period last year but 4 cents ahead of the Street consensus forecast. Group revenues, Discovery said, were essentially flat to last year at $2.886 billion and were modestly in front of analyst's forecasts. 

Ad revenues were also flat, Discovery said, but a 5% gain for distribution fees in the United States supported the group's top line. It also said subscribers to its discovery+ streaming service, which was launched in January, will top 12 million by the end of the month.

"2020 was a year of change, challenge, and opportunity, and our company has shown incredible resilience, creativity and focus as one global team," said CEO David Zaslav. "We finished with strong operating momentum and great command and control across our global businesses, uniquely positioning us to balance our core and next generation businesses."

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"We are off to a promising start in 2021 with the successful launch of discovery+. We have now surpassed 11 million total paying direct-to-consumer subscribers globally and are on pace to be at 12 million by the end of the month, underscoring the value of the investments we've made in content, beloved personalities and brands with huge consumer appeal, supported by industry-leading DTC capabilities," he added 

"Our unmatched global scale and ability to serve consumers everywhere with a truly differentiated offering across platforms, as well as our robust cash flows, even amidst the significant investments in our next generation initiatives and the ongoing COVID-19 pandemic, position us to achieve sustainable long-term growth and drive long-term shareholder value,"  

Discovery shares were marked 0.4% higher in pre-market trading Monday immediately following the earnings release to indicate an opening bell price of $50.98 each.