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.