Discovery Reports Lower 4Q Earnings
Discovery Communications reported lower fourth-quarter profits as foreign currency changes hurt its international operations.
Net income fell 16% to $219 million, or 34 cents a share in the quarter from $260 million, or 38 cents a share, a year ago. The company said that excluding currency and the impact of the acquisition of Eurosport and the sale of SBS Radio, revenues and adjusted operating income before depreciation and amortization would have been up.
Revenues fell 2% to $1.646 billion.
The numbers were lower than Wall Street expectations.
“In 2015, Discovery Communications continued to build momentum with our unmatched worldwide brands and leading multiplatform distribution network. We surpassed 3 billion cumulative viewers, launched more new networks and increased audience and market share, all of which helped to drive steady global growth and strong financial results,” CEO David Zaslav said. “Propelled by our category leadership, broad rights ownership and content and brand expansion across platforms, Discovery is well positioned to thrive in the rapidly evolving media landscape and to drive continued shareholder value in the years ahead.”
Discovery’s U.S. networks registered a 1% increase in adjusted operating income to $410 million for the quarter. Operating expenses were up because of higher content amortization and impairments and marketing costs.
Revenues rose 6% to $787 million. Distribution revenues were up 7% and advertising revenue grew 5%, with higher prices offsetting lower delivery.
Discovery’s International networks had 20% lower operating income at $262 million. Distribution revenues were down 2% and advertising revenues were 11% lower.
Excluding the impact of adding Eurosport, selling SBS Radio and currency changes, adjusted operating income was up 1%, with revenue up 11%. Expenses were up 18% because of higher content expenses and personnel costs.
Broadcasting & Cable Newsletter
The smarter way to stay on top of broadcasting and cable industry. Sign up below
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.