Media analysts didn't expect a blowout fourth quarter from Discovery Networks, given the spongy soft ad market and overall TV audience trends. But the report was even worse than anticipated.
The cable programming conglomerate reported Q4 net income of $250 million, down 13.5 percent from the last three months of 2013. Revenue was up 9 percent to $1.68 billion, but that missed analysts' forecasts.
Ad revenue from Discovery's U.S. networks declined 3 percent, but that was offset by an 8 percent uptick in affiliate revenue from pay-TV operators.
Meanwhile, the conglomerate faces the huge challenge of carving out a new carriage deal with Comcast (NASDAQ: CMCSA), following CEO David Zaslav's vocal criticism of the cable operator's proposed merger with Time Warner Cable (NYSE: TWC).
"As we all know Comcast is the largest cable company, a key platform for any independent programmer of which Discovery is the largest," Zaslav told investors. "With our deal coming up we are hopeful that Comcast will negotiate in good faith like all of our other distributors have over the last several years."
Discovery's current Comcast deal expires this summer.
A renewal agreement with the No. 1 U.S. pay-TV operator aside, Discovery did also announce a deal Thursday with mid-sized cable company Mediacom, renewing carriage rights to 13 networks and also offering TV Everywhere capabilities.
For more:
- visit this Discovery Networks investor relations page
- read this Mediacom press release
- read this Deadline Hollywood story
Related links:
Discovery signs multiplatform renewal with Cablevision, still has to deal with Comcast
Longtime SVOD holdout Discovery Communications caves to Hulu
Discovery reveals details of Hub relaunch, puts Henry Schleiff in charge