Discovery Posts Q4 Revenue Gains

SILVER SPRING: Discovery Communications’ fourth-quarter revenues increased 2 percent year on year to $1.67 billion, with a nice lift at the U.S. networks.

For Q4, 3 percent growth at U.S. networks and slight growth at the international networks were partially offset by a slight decline at education and other. Quarterly net income was up 39 percent to $304 million, primarily due to higher operating results, a $31 million after-tax gain from the Group Nine transaction and currency-related transactional gains, partially offset by lower equity investees and an increase in taxes.

U.S. networks’ revenues in the fourth quarter of 2016 were $812 million, led by 6 percent distribution growth and 1 percent advertising growth. Operating expenses decreased 3 percent, mainly due to lower content amortization, partially offset by higher marketing and personnel costs. Adjusted OIBDA increased 9 percent to $447 million, with higher revenues and lower operating expenses.

International networks’ revenues for Q4 2016 were up slightly to $819 million and adjusted OIBDA decreased 12 percent to $231 million. Changes in foreign currency exchange rates had an impact. Excluding currency effects, total revenues increased 5 percent. Distribution revenues, excluding the impact of currency effects, grew 10 percent, mostly due to higher affiliate rates in Latin America and Europe, as well as higher subscribers in LatAm. Ad revenues, excluding the impact of currency effects, increased 3 percent, primarily due to higher pricing, ratings and volume in Southern Europe and CEEMEA, partially offset by lower pricing, volume and ratings in AsiaPac.

For the full year, revenues of $6.5 billion increased 2 percent compared to the prior year, as 5 percent growth at U.S. networks and 1 percent growth at education and other were partially offset by a 2 percent decline at international networks, primarily due to the sale of SBS Radio and currency effects. Full year net income increased 15 percent to $1.19 billion.

“Discovery’s diversified set of nonfiction, sports and kids’ entertainment brands, and strong strategic positioning continued to drive attractive distribution agreements, helping to deliver solid operating and financial results in 2016,” said David Zaslav, the president and CEO of Discovery Communications. “As we begin 2017, we will continue to invest in our premier global IP and brands to nourish fans across all screens, all platforms and all services to drive shareholder value and propel our business for years to come amid the rapidly changing media landscape.”