Discovery Communications Fourth-Quarter Revenue Rises, Earnings Fall
Discovery Communications on Thursday reported higher fourth-quarter revenue and operating profit, but net income declined as expected.
The cable networks powerhouse, led by CEO David Zaslav, posted revenue of $1.2 billion, compared with $1.1 billion in the year-ago period. The figure met Wall Street expectations.
Operating profit rose from $422 million to $481 million, and adjusted operating income before depreciation and amortization grew 17 percent to $545 million. But earnings from continuing operations fell from $336 million to $224 million, and earnings per share dropped from 86 cents to 61 cents, coming in below Wall Street expectations. The company cited higher taxes and increased equity-based compensation as drivers for the lower earnings.
Revenue growth at Discovery's international networks jumped 15 percent, with U.S. networks revenue gaining 4 percent. At the company's U.S. networks, advertising revenue rose 9 percent, while affiliate fee revenue rose 2 percent. In its international business, ad revenue was up 16 percent, and affiliate fee revenue rose 12 percent.
For 2013, Discovery predicted financial growth helped by the acquisition of the SBS Nordic operations, which is expected to close during the current quarter.
Full-year 2013 revenue should hit $5.575 billion-$5.700 billion, up from $4.487 billion in 2012. Adjusted operating profit will grow to $2.425 billion-$2.525 billion next year, up from $2.095 billion in 2012, the company said. Earnings are expected to rise from $954 million to $1.2 billion-$1.3 billion.
"Discovery's commitment to investing in our brands and developing new and diverse growth opportunities produced another year of strong operating momentum and financial results in 2012," said Zaslav. "The appeal of our content resulted in larger audiences across the globe, enabling us to deliver consistently healthy advertising growth both domestically and internationally, while we further leveraged our valuable programming across emerging distribution platforms worldwide."
He added: "We head into 2013 with significant momentum, having just delivered the highest fourth-quarter domestic viewership in our history, and will continue to invest in strategic growth initiatives so that we can deliver sustained long-term financial results and shareholder value."