logo
Share SHARE
FONT-SIZE Plus   Neg

Discovery Communications Profit Plunges On Expenses - Update

Discovery Communications Inc. (DISCA) Thursday reported a decline in fourth-quarter profit, hurt mainly by higher taxes and mark-to-market equity-based compensation. Meanwhile, revenues for the quarter grew eight percent and in line with Street estimates, mostly on growth in advertising and distribution at its U.S. and International Networks.

Results for the quarter were impacted as income tax expense escalated to $181 million from $9 million a year ago, due to higher tax reserves and the absence of credits recognized that was included in the a year ago quarter.

Mark-to-market equity-based compensation for the quarter totaled $27 million.

Discovery, whose networks include its eponymous Discovery Channel and Animal Planet, reported fourth-quarter net income to common shares of $224 million or $0.61 per share, compared with $336 million or $0.86 per share last year.

On average, 25 analysts polled by Thomson Reuters expected earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter totaled $1.20 billion, compared with $1.11 billion last year. Analysts had a consensus revenues estimate of $1.20 billion for the quarter.

CEO David Zaslav said, "Discovery's commitment to investing in our brands and developing new and diverse growth opportunities produced another year of strong operating momentum and financial results in 2012."

Revenues at International Networks rose 15 percent, led by distribution growth of 12 percent and advertising growth of 16 percent.

Revenues at U.S. Networks were up 4 percent. Advertising revenue increased 9 percent mainly on higher delivery and increased pricing, and distribution grew 2 percent from higher rates and subscriber growth.

For fiscal year 2013, Discovery expects net income of $1.200 billion to $1.300 billion and revenues of $5.575 billion to $5.700 billion.

Analysts currently estimate earnings of $3.48 per share on revenues of $5.43 billion for 2013.

During the quarter, pursuant to its existing stock repurchase program, the company repurchased 4.14 million shares of its common stock for an aggregate purchase price of about $234 million.

Discovery has been expanding its operations in Europe. In December, Discovery agreed with the ProSiebenSat.1 Group to purchase the Nordic television and radio business operations for about $1.7 billion. The company also acquired 20 percent stake in Eurosport and a portfolio of TF1 pay television channels network for a total of $264 million.

Discovery is trading at $70.03, down 2.08%, on the Nasdaq.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
The Royal Bank of Scotland plans to cut 880 jobs from its IT department in London by 2020, a UK labor union reported. Britain's Unite union claimed on Tuesday that the bank informed its staff about a further 40 percent cut of permanent IT jobs, which is said to be part of ongoing deep cost-cutting at the taxpayer-owned bank. The bank also plans a 65 percent reduction of contractors. Discount-store operator Target, Inc. on Wednesday lifted its fiscal 2017 forecast for earnings and comparable sales after reporting higher comps in its second quarter. Net earnings in the quarter declined, while earnings from continuing operations increased with higher sales. Adjusted earnings per share as well as top line beat analysts' estimates. In pre-market, Target shares were up 6.4 percent. Shares of A.P. Moller-Maersk A/S were gaining around 4 percent in the morning trading in Denmark after the shipping and oil company maintained its forecast for higher profit in fiscal 2017, despite the expected negative impact from the June cyber-attack of up to $300 million. In its second quarter, the company slipped to a loss, compared to profit last year.
comments powered by Disqus
Follow RTT