Discovery’s Q1 after Scripps buy dinged by Olympics costs

Discovery Inc.
Net income available to Discovery showed up as a loss of $8 million compared with $215 million in the prior-year quarter. (Discovery Inc.)

Discovery Inc. is reporting its first official quarterly results after successfully acquiring Scripps Networks, but the proceedings were marred somewhat by a loss brought on by Olympics programming costs.

Discovery’s first-quarter revenues were up 43% to $2.3 billion after factoring in the Scripps Networks Interactive, Enthusiast Network and the Oprah Winfrey Network transactions. Without those deals (and excluding foreign currency impacts), Discovery’s revenues increased 14%, as international networks grew 28% and U.S. networks grew 3%.

Discovery’s adjusted OIBDA rose 16% to $697 million. But once again after taking out the transactions and foreign currency considerations, adjusted OIBDA fell 9%, as 3% growth at U.S. networks couldn’t outweigh a 37% decline the international networks experienced due to costs associated with the Olympics.

Net income available to Discovery showed up as a loss of $8 million compared with $215 million in the prior-year quarter primarily due to lower operating results and higher restructuring charges.

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U.S. networks’ revenues rose 42% to $1.17 billion considering the impact of the transactions. But revenues rose 3% with the transactions taken out, as distribution and advertising revenues grew 2% and 4%, respectively.

International networks’ revenues rose 47% to about $1.1 billion (or 28% after the transactions are taken out) driven by 10% growth in distribution revenues and 11% growth in advertising revenues.

“The first quarter of 2018 was a historic and pivotal period for Discovery," said David Zaslav, president and CEO for Discovery, in a statement. "We closed on our transaction to acquire Scripps Networks Interactive, becoming the global leader in real life entertainment and home to an enhanced portfolio of quality and trusted enthusiast brands. As our industry continues to evolve, we are uniquely positioned to maximize the value of our traditional pay-TV business while driving new opportunities and growth from our digital and direct to consumer businesses around the world."