Discovery saw its third quarter earnings continue to be impacted by higher costs related to its recently closed merger with Scripps Networks Interactive (SNI).
The American media conglomerate posted net income totals of US$117 million, or an adjusted 16 cents per share, compared with the $218 million (38 cents per share) it earned in the prior-year period. Improved operating results were “more than offset” by higher restructuring and other charges associated with the integration of Scripps, higher tax expenses and higher interest expenses, Discovery said in a statement.
Discovery reported that its adjusted earnings, which exclude the impact of “amortization of acquisition-related intangible assets”, came in at 52 cents per share, dipping below Wall Street’s consensus estimates of 59 cents.
Revenues in its third quarter surged 57% to $2.59 billion compared with the quarter in the prior year. However, Discovery noted that if these figures excluded the impact of foreign currency fluctuations and the transactions for SNI, Motor Trend Group and OWN, its revenues ticked upward by 1%, with a 3% increase in international properties and a 2% growth in its U.S. networks.
The company’s adjusted operating income before depreciation and amortization (OIBDA), meanwhile, also rose 18%, excluding foreign currency fluctuations, compared to the prior year quarter. Discovery’s international assets saw its OIBDA increase 27%, while OIDBA for its U.S. properties grew 13%.
In March, Discovery completed its $14.6 billion acquisition of Scripps Networks Interactive, adding networks HGTV, Food Network, DIY Network, Cooking Channel, Travel Channel and Great American Country to the Discovery channel portfolio.
The company is expected to move its headquarters from Silver Spring, Maryland to New York City in 2019, while also establishing a national operations headquarters in Knoxville, Tennessee.
“Our solid third quarter results demonstrate the strength of our brands and unmatched multi-platform distribution network, as we continue to position our broad suite of IP to maximize value and extend our global presence,” said David Zaslav (pictured), president and CEO for Discovery, in a statement. “We are very pleased with how far we’ve come in the eight months since we closed our merger with Scripps Networks, highlighted by the acceleration of synergy generation and strong adjusted OIBDA growth in the third quarter.
“We continue to drive organic growth opportunities across our diverse portfolio, further positioning us for continued cash flow generation and additional value creation. We remain increasingly optimistic about the roadmap ahead of us as we drive forward with our plan to transform our company.”