Discovery missed the mark with its third-quarter 2018 earnings, but the company reported the *right* revenue number, according to media analysts.
Wall Street had forecast Q3 earnings per share (EPS) of 59 cents on $2.6 billion in revenue, according to a consensus compiled by Yahoo Finance. Discovery posted $2.592 billion in revenue and 52 cents in adjusted EPS.
Domestically, Discovery saw its advertising revenue increase from the comparable quarter last year. That growth was due to pricing increases as the company’s linear ratings declined. If we set aside the expenses of absorbing Scripps, Discovery’s U.S. networks also cut costs a bit.
Internationally, distribution ticked up and adjusted expenses ticked down.
Taking on the Scripps channels increases revenue and expenses. Discovery is allowed to provide calculations that factor those out here for fair comparisons to Q3 2017.
“Our solid third quarter results demonstrate the strength of our brands and unmatched multi-platform distribution network, as we continue to position our broad suite of IP to maximize value and extend our global presence,” David Zaslav, Discovery president and CEO, said in remarks accompanying the financial press release. “We are very pleased with how far we’ve come in the eight months since we closed our merger with Scripps Networks, highlighted by the acceleration of synergy generation and strong Adjusted OIBDA growth in the third quarter.”
“Additionally, we continue to drive organic growth opportunities across our diverse portfolio, further positioning us for continued cash flow generation and additional value creation,” he continued. “We remain increasingly optimistic about the roadmap ahead of us as we drive forward with our plan to transform our company.”
Zaslav and other Discovery executives will hold a conference call at 8:30 a.m. ET to discuss the quarter in greater detail.
Shares of DISCA stock closed Wednesday afternoon at $33.08, down 21 cents. The U.S. stock markets will reopen for their regular trading day at 9:30 a.m. ET.
In March, Discovery closed its near-$15 billion acquisition of Scripps Networks, which brought popular cable channels like HGTV and Food Network under the same umbrella as TLC and Discovery Channel.