NEW YORK (TheStreet) -- Shares of Discovery Communications (DISCA) are up 1.5% to $33.23 in afternoon trading Monday, one day ahead of the company's first quarter earnings release before the market opens on Tuesday.
The company is expected to earn 35 cents per share on revenue of $1.54 billion for the first quarter, according to analysts polled by Thomson Reuters.
In the same quarter a year ago, the company reported earnings of 33 cents per share on revenue of $1.41 billion.
Silver Spring, MD-based Discovery is a global nonfiction media and entertainment company that provide programming across multiple distribution platforms worldwide.
Separately, TheStreet Ratings team rates DISCOVERY COMMUNICATIONS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DISCOVERY COMMUNICATIONS INC (DISCA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DISCA's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 9.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $425.00 million or 19.71% when compared to the same quarter last year. Despite an increase in cash flow, DISCOVERY COMMUNICATIONS INC's cash flow growth rate is still lower than the industry average growth rate of 41.37%.
- The gross profit margin for DISCOVERY COMMUNICATIONS INC is currently very high, coming in at 88.25%. Regardless of DISCA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.91% trails the industry average.
- Even though the current debt-to-equity ratio is 1.28, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.75 is weak.
- You can view the full analysis from the report here: DISCA Ratings Report