There doesn’t appear to be a second shock in Discovery Communications’ Q1 earnings this morning, after it made its surprising announcement last night about a major belt-tightening effort.
At first glance, the numbers appear to be roughly what Wall Street expected. Net income at $263 million was up 5.2% vs last year’s Q1 on revenues fo $1.56 billion, up 1.6%. The top line matched analysts’ forecasts. Earnings at 42 cents a share beat predictions for 40 cents.
Earnings come in at 46 cents if you take away the impact of acquisition related intangible assets, and the effect of the strong dollar vs overseas currencies.
“Discovery’s business momentum continued to build in the first quarter with strong viewership across our worldwide portfolio of brands and platforms,” CEO David Zaslav says. “Given the long-term growth profile associated with the investments we’ve made, I remain optimistic about our overall operating and financial prospects, the opportunities ahead, and our potential to deliver significant shareholder value.”
At the U.S. Networks adjusted cash flow improved 11% to $473 million with revenues up 8% to $807 million. The company says its higher rates drove an 8% improvement in revenues from distributors.
Meanwhile the closely watched ad sales number was up 7% as higher pricing helped to outweigh ratings declines at networks including TLC, American Heroes Channel, Discovery Family, and OWN.
Thee International business was less even with adjusted cash flow down 14% to $185 million on revenues of $711 million, down 3%. Discovery says that revenues would have been up 7% if you factor out the strong dollar and its sale last year of SBS Radio.
Revenues from distributors was up 4%, but would be +12% without the currency exchange imbalance. And ad sales, down 9%, would have been up 4%