Discovery Communications reported modest gains in the fourth quarter, with revenue up 11% and profits up 7% at U.S. networks, and also said the U.S. Department of Justice has approved its pending acquisition of Scripps Networks Interactive.
In the quarter, total revenue of $1,864 million rose 11% compared to the prior year due to 13% growth at international networks and 10% growth at U.S. networks. Operating income before tax, depreciation and amortization increased 10% to $636 million due to 9% growth at international networks and 7% growth at U.S. networks.
This comes as the broadcaster stated that the DOJ had closed its investigation into Discovery’s proposed acquisition of Scripps. It is now just waiting for the completion of a review in Ireland and “other customary closing conditions” before it expects the $14.6B to close by the end of the first quarter. Earlier this month, the European Commission cleared its acquisition of the Food Network and HGTV owner.
“We are pleased to have passed this significant regulatory milestone on our path to acquire Scripps Networks Interactive,” said president and CEO David Zaslav. “The conclusion of the Department of Justice’s investigation is an integral step toward closing our transaction. We look forward to combining these two great companies to the benefit of our enthusiast audiences around the world.”
The acquisition hit the company with a $59M transaction cost and Discovery also found itself dealing with a $1.3B “after-tax goodwill impairment charge” at its European operations. However, these did not prevent the Discovery Channel and TLC owner from posting better-than-expected financial results.
In its full-year report, it noted that 5% distribution growth and 3% advertising growth helped its U.S. business, while advertising revenues grew by 3% globally due to success in Europe and Latin America. While international distribution revenues grew by 9%, largely thanks to higher fees in Europe following further investment in sports content, this was partially offset by lower subscribers in Latin America and lower contractual rates in Asia.