Discovery Withdraws Financial Guidance After Olympics Move

Company expected $175M-$200M 3Q loss
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After the coronavirus crisis forced the summer Olympics to be postponed, Discovery, which holds the European TV rights to the games, withdrew its guidance to investors about its expected financial performance.

In a filing with the Securities and Exchange Commission Tuesday, Discovery noted that it has expected expenses related to the Olympics to contribute to a $175 million to $200 million loss in the third quarter.

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With the postponement of the Olympics, Discovery said it “expects that Olympic related revenue and expenses will shift from 2020 to fiscal 2021.

“As a result of the unknown impact of COVID-19 on the company’s financial results and the uncertainty related to its duration, as well as the impact of the postponement of the 2020 Olympic Games, the company is withdrawing its fiscal 2020 outlook. The company is not providing an updated fiscal 2020 outlook at this time,” Discovery said in the filing.

Discovery further noted that as a result of the global pandemic, TV viewing audiences around the globe have increased dramatically.

“The company has experienced an increase in ratings and delivery across many television viewing markets as many people are self-isolating at home. This is helping to offset attributed weakness from economic conditions, and the company is evaluating the impact of improved ratings and delivery on its performance,” Discovery said.

“The Company also continues to pursue a number of cost savings initiatives that it hopes will offset a portion of the revenue losses due to the impact of COVID-19, including those from production shutdowns and delays,” the company said.

Discovery stock was up 8.33% to $20.03 a share on Tuesday.

Earlier on Tuesday, Comcast, which holds the U.S. TV rights to the Olympics, made filing with the SEC indicating that the COVID-19 crisis “could have a material adverse impact on our results of operations over the near to medium term.”

In the filing, Comcast said the virus was affecting its business in a number of ways, including forcing the company to close its theme parks, delay theatrical distribution of films and disrupting the creation and availability of film and television programming.

Even before the postponement of the Olympics, the company noted it was affected by the cancellation of sports events.

“As they affect Sky, these impacts materially exacerbate what was an already deteriorating economic environment and advertising market in the UK and Europe in 2019,” the filing said. “Our Comcast Cable business, while our network performs well to meet the challenge of business and schooling from home, will not be unaffected either as economic stress impacts our residential and business services customer base.”

The impact the COVID-19 crisis will have on Comcast’s business will depend on the extent of governmental measures and the length of time those measures remain in place, the company said.

“At this point, it is impossible to predict such extent and duration and the degree to which supply and demand for our products and services, including advertising, will be affected,” Comcast said in the filing. “This uncertainty makes it challenging for management to estimate the future performance of our businesses, particularly over the near to medium term. However, the impact of COVID-19 could have a material adverse impact on our results of operations over the near to medium term.”

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