Discovery Q4 Profit Slips

SILVER SPRING: Fourth-quarter revenues at Discovery Communications of $1.65 billion decreased 2 percent compared to the year-ago period, as growth at the U.S. networks was more than offset by a decline at the international networks, primarily due to currency effects.

Adjusted OIBDA decreased 10 percent to $574 million. Total Company revenues grew 5 percent and adjusted OIBDA decreased 1 percent excluding currency effects. Fourth-quarter net income available to Discovery Communications stockholders decreased to $219 million, from the $250 million reported in Q4 a year ago.

At the U.S. networks, revenues in the fourth quarter increased 6 percent to $787 million, lifted by 7 percent distribution growth and 5 percent advertising growth. Distribution revenue growth was primarily driven by higher rates. Advertising revenues increased 5 percent, primarily due to higher pricing partially offset by lower delivery. Adjusted OIBDA increased 1 percent to $410 million, as revenue growth was partially offset by an 11 percent increase in operating expenses, mainly due to higher content amortization and impairments and marketing costs.

Q4 revenues from the international networks decreased 8 percent to $816 million and adjusted OIBDA decreased 20 percent to $262 million. Changes in foreign currency-exchange rates reduced fourth-quarter international revenues and adjusted OIBDA growth by 14 percent and 16 percent, respectively. Excluding currency effects and the impact of Eurosport and SBS Radio, total revenues were up 11 percent. Distribution revenues, excluding the impact of Eurosport and currency effects, were up 8 percent, mainly from increased rates and subscribers in Latin America. Advertising revenues (excluding the impact of Eurosport, SBS Radio and currency effects) were up 12 percent, primarily due to higher pricing and ratings in Southern Europe, higher pricing and volume in Latin America, and higher pricing and volume in Asia. Excluding the impact of Eurosport, SBS Radio and currency, adjusted OIBDA was up 1 percent, with the 11 percent revenue growth partially offset by an 18 percent increase in operating expenses.

For the full year, revenues of $6.4 billion increased 2 percent compared to the prior year, as 6 percent growth at U.S. networks was partially offset by a 2 percent decline at international networks. Adjusted OIBDA decreased 4 percent to $2.4 billion.

David Zaslav, the president and CEO of Discovery Communications, said: “In 2015, Discovery Communications continued to build momentum with our unmatched worldwide brands and leading multiplatform distribution network. We surpassed 3 billion cumulative viewers, launched more new networks and increased audience and market share, all of which helped to drive steady global growth and strong financial results. Propelled by our category leadership, broad rights ownership and content and brand expansion across platforms, Discovery is well positioned to thrive in the rapidly evolving media landscape and to drive continued shareholder value in the years ahead.”