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Discovery Communications on Thursday reported weaker-than-expected fourth-quarter financials.
The cable networks company, led by CEO David Zaslav, posted quarterly earnings of $250 million, down 13.5 percent compared with $289 million in the year-ago period. The latest profit amounted to 38 cents per share. Adjusted operating income before depreciation and amortization, another profitability metric, also saw a slight drop to $638 million.
The company cited “higher restructuring costs and lower equity earnings” as drivers behind the lower profit. Discovery was also affected by lower U.S. ratings and foreign-exchange headwinds in the latest quarter. “Changes in foreign currency exchange rates reduced fourth-quarter revenue growth by 5 percent and adjusted OIBDA growth by 6 percent,” it said. The strong dollar has seen various companies cite currency hits for foreign units whose local-currency revenue currently translates into lower dollar figures.
Revenue rose to $1.68 billion from $1.54 billion driven by 17 percent growth at the company’s international networks and 1 percent growth at its U.S. networks. U.S. advertising revenue dropped 3 percent in the latest period, while distribution revenue rose 8 percent. Discovery’s international channels posted a 7 percent ad increase and 24 percent jump in distribution revenue.
Wall Street analysts had on average expected earnings of $280.9 million, or 41 cents per share, on revenue of $1.7 billion. The firm operates such brands as Discovery Channel, TLC, Animal Planet and OWN, a joint venture with Oprah Winfrey.
Zaslav said: “The healthy performance of our core business coupled with increasing contributions from our recent strategic acquisitions led to another year of solid operational and financial results and increasing capital returns in 2014.”
He added: “Despite a more challenging U.S market and significant foreign currency headwinds, our content portfolio once again drove audience gains and boosted our market share around the world. As we move into 2015, we are confident that our long-term content investment strategy, strong global IP and brands, and local approach to markets will continue to drive our results and enable us to deliver additional value to shareholders.”
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