People/Biz

Discovery, Inc. posts net income loss, surging revenues for Q1

Discovery, Inc.’s acquisition of Scripps Networks Interactive was among the factors that led to a net income loss of US$8 million in the first quarter, which ended March 31, 2018. The ...
May 8, 2018

Discovery, Inc.’s acquisition of Scripps Networks Interactive was among the factors that led to a net income loss of US$8 million in the first quarter, which ended March 31, 2018.

The loss, compared with a profit of $215 million in the year prior, was chalked up to lower operating results, higher restructuring charges, and transactions costs associated with the acquisition of Scripps.

Revenues, meanwhile, surged 14% to $2.3 billion as International Networks grew by 28% while the U.S. networks posted a gains of 3%. The numbers exclude foreign currency transactions and the Scripps, The Enthusiast Network and Oprah Winfrey Network transactions. This is an increase of 43% compared to the company’s first quarter in 2017.

First quarter Adjusted OIBDA increased 16% to $697 million on a reported basis, and excludes the impact of the above mentioned transactions and foreign currency fluctuations.

U.S. Networks’ revenues for the first quarter of 2018 increased 42% to $1.2 billion on a reported basis compared with the prior year quarter. Excluding the impact of the transactions, revenues rose by 3% as distribution and advertising revenues grew 2% and 4%, respectively. Distribution revenue growth for the domestic nets was driven by increases in affiliate fee rates, partially offset by a decline in affiliate subscribers, Discovery said.

On a pro forma basis, however, subscribers to Discovery’s fully distributed networks shrank by 3%, while subscribers to the Silver Spring, Maryland-headquartered media conglomerate’s total portfolio declined by 5% in the quarter.

Meanwhile, International Networks’ first quarter revenues increased 47% to $1.1 billion. Excluding the impact of the acquisition of Scripps and currency effects, International Networks’ revenues increased 28%, driven by 10% growth in distribution revenues, 11% growth in advertising revenues and significant growth in other revenues.

“As our industry continues to evolve, we are uniquely positioned to maximize the value of our traditional pay-TV business while driving new opportunities and growth from our digital and direct to consumer businesses around the world,” said David Zaslav (pictured), president and CEO for Discovery.

About The Author
Barry Walsh is editor and content director for realscreen, and has served as editor of the publication since 2009. With a career in entertainment media that spans two decades, prior to realscreen, he held the associate editor post for now defunct sister publication Boards, which focused on the advertising and commercial production industries. Before Boards, he served as editor of Canadian Music Network, a weekly music industry trade, and as music editor for HMV.com. As content director, he also oversees the development of content for the brand's market-leading events, the Realscreen Summit and Realscreen West, as well as new content initiatives.

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