Discovery Communications today reported third-quarter earnings which highlighted revenues totaling $1.65 billion, up 6% year over year.
The higher revenues were driven by 11% growth at international networks and 4% growth at U.S. networks. Third-quarter net income remained flat at $218 million due to improved operating results being offset by $142 million in after-tax Scripps transaction-related costs, currency-related transactional losses, and losses from equity investees primarily due to solar investments.
"Advertising and global distribution revenue growth helped to drive solid third quarter results for Discovery," said Discovery President and CEO David Zaslav in a statement. "We continued to focus on investments to strengthen our worldwide IP portfolio as well as strategic partnerships to nourish global superfans across every screen, platform and service. Additionally, we are excited by the prospects for a combined Discovery and Scripps as we continue to make progress on the transaction to create a global leader in real life entertainment."
Zaslav said that Discovery still anticipates closing the Scripps deal in early 2018.
Discovery’s U.S. Networks revenues for the third quarter rose 4% to $823 million, helped along by 6% distribution growth and 3% advertising growth. Discovery attributed the distribution growth to increases in affiliate fee rates and content licensing revenue, partially offset by declines in affiliate subscribers.
Across Discovery’s entire channel portfolio, subscribers fell 5% during the third quarter and subscribers for fully distributed networks fell 3%. Meanwhile, advertising revenue growth was due to higher pricing and continued monetization of Discovery’s TV Everywhere platform. Operating expenses rose 2% mainly due to higher content spend, partially offset by Group Nine.
International networks' revenues rose 11% to $796 million as distribution revenues, excluding the impact of currency effects, grew 9% thanks to higher affiliate rates in Europe and Latin America. Advertising revenues, excluding the impact of currency effects, increased 5% due to higher ratings in Southern Europe; Latin America; and Central and Eastern Europe, Middle East and Africa.