The cable networks company says that Q4 profits were dinged by an increase in tax reserves and its accounting for stock-based compensation in a report that at first glance seems to have few big surprises. Discovery reported net income of $224M, -33.3% vs the last three months of 2011, on revenues of $1.2B, +8.5%. The revenue number is right where analysts expected it to be. But earnings at 61 cents a share contrast with expectations for 76 cents. The company tells the Street this morning that revenues in 2013 will be at least $5.6B and could go as high as $5.7B, which would be +27%, assuming its acquisition of the SBS Nordic operations closes in this quarter. That’s well ahead of the forecast by RBC Capital Markets’ David Bank, who expected $5.4B for 2013. Analysts likely will have questions about the performance of Discovery’s U.S. networks, where revenues increased just 4% to $703M in Q4 with operating income of $408M, +13%. The earnings report says that while ad sales were +9%, distribution revenue only rose 2% due to an apparent slowdown in licensing. At the international networks, revenues were +15% to $462M with operating income of $185M, +22.5%. “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,” CEO David Zaslav says.
Discovery’s Q4 Earnings Miss Expectations But Guidance For 2013 Is Upbeat
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