Discovery Lowers 2012 Guidance After Q3 Results Fall Short Of Expectations
The cash kick from Netflix that did so much to help Discovery‘s Q3 earnings last year now is partly responsible for a report that seems to pale in comparison. The cable networks company reported net income of $206M, -13.1%, on revenues of $1.08B, -0.4%. Analysts expected revenues to come in slightly higher at $1.09B. But the 55 cent earnings-per-share number really stands out in contrast to the Street’s forecast for 63 cents. Discovery says a 7% gain from its overseas networks was offset by a 4% drop in the U.S. It attributes the decline to the lack of a new licensing deal like it had last year with Netflix as well as the effects of fluctuating foreign currencies, costs from equity-based compensation, and higher interest and tax expenses. Revenues at the U.S. networks were $664M, wre down 4% — but would have been up 5% if you factor out last year’s streaming video deal. Ad sales were up 7%.
Related: Discovery CEO Says OWN Will Become Less “Teachy And Preachy” With Tyler Perry
Still, the company ended up lowering its outlook for the full-year results. It says that total revenue could go as high as $4.53B, down from the $4.65B it said was possible three months ago. “Going forward we remain committed to thoughtfully investing in our brands and platforms while delivering sustained financial success and returning capital to our shareholders,” CEO David Zaslav says.
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