Discovery reports flat earnings for Q1

Discovery Communications’ first quarter revenues were $1.561 billion, increasing 2% compared to the prior year.



discoveryAn 8% growth at US networks was partially offset by a 3% decline at international networks, primarily due to currency effects, and lower revenues at education and other.

First quarter net income increased 5% to $263 million ($0.42 per diluted share) compared to $250 million ($0.37 per diluted share) for the first quarter of 2015, primarily due to improved operating results, a decrease in taxes, lower currency-related losses, and a gain from the sale of SBS Radio.

“Discovery’s business momentum continued to build in the first quarter with strong viewership across our worldwide portfolio of brands and platforms. Our unmatched global distribution network, diverse, much loved brands, and unique flexible business model yet again produced strong results, particularly in the US,” said David Zaslav, president and CEO of Discovery. 

He added: “We have also made progress in reaching consumers across the world’s seven billion screens with a robust multiplatform strategy that is increasingly showing potential to drive growth in the future. Given the long-term growth profile associated with the investments we’ve made, I remain optimistic about our overall operating and financial prospects, the opportunities ahead, and our potential to deliver significant shareholder value.”

Part of that strategy is evident in the joint equity stake in Otoy that it recently took along with Time Warner’s premium channel operation. The firm says it will use the new investment cash to “fuel development and distribution of original holographic content, enabling HBO and Discovery to deliver new entertainment experiences to consumers across TV, mobile, Web, social and emerging wearable technologies such as virtual and augmented reality.”

The news comes as it disclosed that it is planning $40 million-$60 million in layoffs through the end of September. Discovery said in a Securities and Exchange Commission filing that it “expects to incur severance and other related expenses of between $40 and $60 million relating to all personnel adjustments.”

Zaslav said the cuts were forced by the company’s need to adjust its business operations to “maintain our leadership position, stay ahead of the industry and have the resources to invest in new areas of growth.”