Discovery Communications (DISCA) released disappointing quarterly results on Tuesday that sent its stock price into the red, with the broadcaster reporting “tepid underlying growth trends,” according to Pivotal Research.
Adjusted earnings per diluted share slipped to $0.66 from $0.68, missing the consensus on Capital IQ for $0.86 a share. Revenue jumped 63% to $2.85 billion, in line with the Street’s expectations.
“Restructuring expenses are now expected to be higher, book taxes are expected to be higher and foreign exchange will provide less of a benefit than previously expected,” said Brian Wieser, a Pivotal senior research analyst.
Adjusted operating income before depreciation and amortization, excluding foreign-currency fluctuations and transactions with Scripps Networks Interactive, Motor Trend Group, and the Oprah Winfrey Network, was “consistent with the prior year quarter,” Discovery said. A 12% increase at international networks was offset by a 4% decrease at US networks, the company said.
“We delivered solid financial results in our first full quarter as a combined company and continued to make great progress with our integration of Scripps Networks Interactive and our pivot to digital, mobile and direct to consumer products and services,” said David Zaslav, Discovery’s chief executive.
Pivotal’s Wieser said the results and outlook for Discovery “was slightly worse than we previously anticipated, although not meaningfully so.” Still, he sees the television business facing “gently declining ad revenues, slightly increasing distribution revenues and gradually worsening underlying margins,” he said.