Was Wall Street too panicked by recent signs of pay TV cord-cutting with its broad retreat from media stocks over the last few months? You might think so after the latest round of cable and satellite reports showing surprisingly small declines in TV subs. But while they seem to bode well for Discovery Communications, CEO David Zaslav isn’t ready to declare a trend just yet.

Sub numbers from Comcast, Time Warner Cable, AT&T’s DirecTV, Charter and others were “better than what we had in our plan” for continuing subscription drops, he told analysts this morning in a call to discuss Q3 earnings. But even though they were “very encouraging,” he added that “we’ll just have to see.”

Discovery will see more meaningful numbers when distributors write checks for its networks, which collect for each subscriber they reach. Payments usually trail the delivery of the content by as much as three months.

The CEO also is reluctant to say whether improvements in ad sales represent a turnaround after more than a year of striking industrywide declines. “It’s too early to get a sense” of any cancellations of sales from the spring’s upfront market, he says.

discovery channel logoMost of Discovery’s 6% increase in domestic sales in Q3 came from traditional linear TV, benefiting from improved ratings at the Discovery Channel and other properties. But “it’s way too difficult to prognosticate where the ad market is going. …We’re going to continue to ride this out and hope the advertising market stays.”

Zaslav hopes to see improvements in digital ad sales, acknowledging that “we haven’t done a great job of monetizing that. It’s break even.” He spoke admiringly of Vice which has “done an extraordinarily good job of monetizing their streams.”

Discovery hopes to follow: “The good news is that we’re talking to advertisers who like the scale we have.” That could lead to “significant upside” for the company “because we haven’t been great at it.”

Executives on the call said that Discovery’s decision to raise its stock repurchase effort by $2 billion — including $1.5 billion over the next 12 months — reflects its optimism. Three months ago the company said it probably wouldn’t repurchase additional shares until the end of this year to make sure it has enough cash for acquisitions and to pay down debt.

But with “our solid and better than expected third-quarter revenues and bottom line results” and other factors including today’s low interest rates, “we find the return on buying our shares at these levels to be extremely attractive,” CFO Andrew Warren says. Discovery now is “comfortable” with debt of as much as 3.25 times its cash flow, up from its previous target of 2.75 times.

“We’re still going to have a lot of powder,” he says.