Discovery Communication has reported earnings for the first-quarter 2017 that fell short of analyst expectations. However, the U.S. cable network group also noted modest financial growth for Q1, caused by the timing of investment costs and higher spending across technology and infrastructure.
Discovery Communications, and owner of TLC, OWN and the Discovery Channel, reported rising earnings of 3% compared to the prior year to US$1.6 billion, driven largely by 5% growth at its international networks and 3% growth at its U.S. networks.
“Improved ratings across many of Discovery’s key distinctive programs and brands, coupled with strong global distribution growth, led to solid organic growth in the first quarter,” said Discovery Communications president and CEO David Zaslav (pictured) in a statement.
“Beyond our linear business,” he added, “we continue to focus on new strategic partnerships and investments to help drive our multiplatform growth strategy and ensure that we reach our global superfans on every screen.”
Discovery’s net income, meanwhile, saw a drop of 18% to $215 million. The company stated in its financial report higher operating results and lower income tax expenses were offset by losses from equity investments and spending on solar projects.
Those projects, Discovery noted, are expected to lift net income for the full year by $34 million, or $0.06 per share.
Distribution revenue in the U.S. was up 5% to $408 million, fueled in part to higher rates partially offset by declining subscribers. However, international distribution surged 10% to $447 million driven by higher affiliate rates in Europe and Latin America, as well as increasing subscriber bases.
Discovery Communications most recently revealed that it had sold off UK unscripted production companies Raw TV and betty to super indie producer-distributor All3Media, the company that was acquired in 2014 by Discovery and Liberty Global in a 50-50 joint venture.