Discovery (DISCA) Q4 Earnings Beat, Scripps Buyout On Track

Discovery Communications, Inc. (DISCA - Free Report) performed well in the fourth quarter of 2017, wherein revenues and earnings surpassed the Zacks Consensus Estimate.

The company’s earnings (excluding $2.46 from non-recurring items) of 47 cents per share surpassed the Zacks Consensus Estimate of 39 cents. The bottom line, however, declined 9.6% on a year-over-year basis owing to higher costs.

Discovery’s fourth-quarter revenues of $1,864 million improved 11.5% on a year-over-year basis. Also, the top line outpaced the Zacks Consensus Estimate of $1,783 million. In fact, revenue growth was witnessed across all major divisions of the company. Quarterly adjusted operating income before depreciation and amortization (OIBDA) increased 10% year over year.

Discovery Communications, Inc. Price, Consensus and EPS Surprise

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Discovery Communications, Inc. Price, Consensus and EPS Surprise | Discovery Communications, Inc. Quote

Performance Details

Revenues from Discovery’s U.S. Networks division rose 10% to $892 million. Segmental growth was driven by 7% and 8% growth in distribution and advertising revenues, respectively.

Distribution revenues came in at $402 million compared with $375 million a year ago. Higher affiliate fee rates contributed to the increase. However, total portfolio subscribers decreased 5% while subscribers of the company’s fully distributed networks declined 3% in the quarter.

Advertising revenues came in at $456 million compared with $421 million a year ago.Revenues from other sources increased to $34 million from $16 million in the previous year. The substantial improvement was primarily owing to Discovery's joint venture with TEN for automotive media. Also, adjusted OIBDA was up 7% year over year at the segment. On the contrary, adjusted OIBDA margin declined to 54% from 55% a year ago.

International Networks revenues rose 13% to $927 million. While Distribution revenues in the segment improved 15% to $479 million, advertising revenues increased 11% to $419 million. Revenues from other sources were up significantly on a year-over-year basis to $29 million. Adjusted OIBDA margin slid to 27% from 28% a year ago.

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