Media and entertainment company Discovery Communications, Inc. (DISCA, DISCB,DISCK) reported Wednesday a 46% year-over-year growth in profit for the fourth quarter, reflecting strong performance across its operating segments, lower restructuring and impairment charges as well as 7% revenue growth. Earnings per share for the quarter surged 44%, and came in line with analysts' expectations. The company also provided revenue guidance for the full year 2010, in line with consensus estimate.
In a statement, president and chief executive officer, David Zaslav said, "The strength of Discovery's performance throughout 2009 reflected the quality of our distribution platform and content assets and our focus on delivering real operating leverage. The affiliate fees we generate across the globe provided consistent resiliency throughout this past year, while the ratings growth across our networks and the value of our unique content enabled advertising to grow despite the weak environment."
Fourth Quarter Results
The Silver Spring, Maryland-based company reported net income of $155 million or $0.36 per share for the fourth quarter, higher than $106 million or $0.25 per share in the prior-year quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.36 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Adjusted operating income before depreciation and amortization increased 8% to $390 million, driven by a 42% growth at international networks, partially offset by a 4% decline at U.S. networks.
Total revenues for the quarter increased 7% to $964 million from $904 million in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $942.06.
Revenues from distribution for the fourth quarter rose to $436 million from $401 million in the prior-year quarter. Advertising revenues for the quarter totaled $418 million, higher than $382 million in the year-ago quarter, while other revenues declined to $110 million from $121 million last year.
Among Discovery's peers, Cincinnati, Ohio-based Scripps Networks Interactive, Inc. (SNI) also reported today a profit for the fourth quarter compared to a loss last year as the year-ago quarter had a significant write-down of goodwill and intangible assets. Net income was $94.35 million or $0.57 per share, compared to a net loss of $153.55 million or $0.94 per share in the year-ago quarter. Consolidated quarterly revenues increased 6.0% to $429.74 million from $405.34 million in the prior-year quarter.
Segmental Details
Revenues from the U.S. networks for the fourth quarter increased 3% to $554 million from $536 million in the prior-year quarter, primarily driven by distribution and advertising revenue growth amid higher rates and subscriber growth.
International networks revenues for the quarter rose 22% to $358 million from $294 million in the year-ago quarter, boosted by strong 33% advertising revenue growth as well as favorable impact from foreign currency fluctuations. Excluding the impact of foreign currency fluctuations, revenues grew only 16%.
Commerce, education and other revenues totaled $49 million, down 30% from $70 million in the same quarter last year, hurt primarily from lower commerce revenues as a result of the transition to a new licensing model, partially offset by increased educational revenues from higher streaming volumes.
Other Metrics
Operating income for the fourth quarter rose to $292 million from $284 million in the prior-year quarter, while total costs and operating expenses were $672 million, up from $620 million in the year-ago quarter.
Selling, general and administrative expenses for the quarter increased to $318 million from $270 million in the prior-year quarter. Restructuring and impairment charges were $19 million, lower than $44 million in the comparable quarter a year ago.
The company ended the fourth quarter with cash and cash equivalents of $623 million, compared to $100 million at end of the prior-year quarter.
Full-year Highlights
For fiscal 2009, the company reported net income of $552 million or $1.30 per share, higher than $317 million or $0.98 per share in the previous year.
Income from continuing operations for the year increased to $559 million or $1.30 per share from $402 million or $0.85 per share in the prior year. Analysts expected the company to report earnings of $1.29 per share for fiscal 2009.
Total revenues for the full year increased 2% to $3.52 billion from $3.44 billion posted in fiscal 2008. The Street was looking for full-year 2009 revenues of $3.49 billion.
Looking Ahead...
"As we look to 2010, we remain focused on further monetizing our ratings momentum in an improving advertising environment, continuing to strengthen our distribution platforms and relationships and, most importantly, delivering high quality content to our viewers," Zaslav added.
For fiscal 2010, the company expects net income in a range of $525 million to $550 million, and adjusted OIBDA between $1.56 billion and $1.64 billion. Total revenues are projected between $3.625 billion and $3.750 billion.
Analysts currently expect the the company to earn $1.62 per share for fiscal 2010, on annual revenues of $3.72 billion.
Stock Quote
DISCA closed Tuesday's regular trading session at $29.27, up $0.62 on a volume of 2.75 million shares, sharply higher than the three-month average volume of 1.30 million shares. In the past 52-week period, the stock has been trading in a broad range of $12.46 to $33.02.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.