Discovery Q3 Revenue Up, Profit Down

Discovery’s profit fell in the third quarter, impacted by charges associated with its Scripps Networks Interactive acquisition.

Q3 net income available to Discovery was $117 million, compared with $218 million in the prior year quarter. Improved operating results were more than offset by higher restructuring and other charges associated with the integration of Scripps Networks, higher tax expenses and higher interest expense.

Revenues of $2.6 billion were up 57 percent on a reported basis compared with the prior-year quarter. Excluding the impact of foreign currency fluctuations and the Scripps Networks, Motor Trend Group and OWN transactions, revenues increased 1 percent, as a 3-percent increase from international networks and a 2-percent increase from U.S. networks were partially offset by a sizable drop in education and other revenues (due to the sale of the education business on April 30).

At Discovery’s U.S. networks, an 8-percent increase in advertising revenues was offset by a 2-percent decrease in distribution revenues and a 29-percent decrease in other revenues. Revenues increased to $1.7 billion on a reported basis compared with the prior-year quarter.

At Discovery’s international networks, revenue from distribution was up 3 percent, while advertising revenue remained flat and other revenues were down by $1 million. Revenues on a reported basis were up 15 percent to $916 million.

“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, president and CEO for Discovery. “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. Additionally, 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.”