Investors will be looking at the international numbers; Q3 was the first full quarter in which Discovery owned Scandinavian TV and radio company SBS Nordic. And at first glance it looks like things were OK for the company’s overseas ad sales, which had been a concern. Discovery’s net income of $256M was +24.4% vs last year’s Q3 on revenues of $1.38B, +27.8%. The top line barely missed expectations for $1.39B. Earnings for continuing operations, at 71 cents a share, were a penny shy of analyst forecasts. The U.S. cable networks generated $733M in revenue, +10.4%, and maintained their cash flow margin of 58%. Ad sales increased 12% to $383M while revenue from distributors was +10% to $329M with help from Discovery’s deal with Netflix. The international results were expected to be lopsided after taking a hit from last year’s Olympics. Revenues were up 59% to $620M, although the cash flow margin fell to 37% from 44%. Ad sales stood out, growing 127% to $282M. Distribution revenues increased 29% to $322M. If you factor out the newly acquired businesses and foreign currency fluctuations, revenues would have been up 18%. “Discovery’s strong third quarter results once again demonstrate the breadth and depth of our brands and the myriad of opportunities across our global distribution platform,” CEO David Zaslav says.
Discovery Earnings Continued To Grow In Q3 With Help From International Networks
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