The acquisition of Scripps Networks Interactive is likely to be a boon to the new Discovery Inc., which has swelled in size thanks to the companies’ recent merger. But placing the owner of Food Network and HGTV under its corporate aegis pushed the company to a loss in its first quarter as a merged entity.
The company, which also owns the Discovery Channel, TLC and the Oprah Winfrey Network said first quarter net income fell to a loss of $8 million, compared with $215 million in the year-earlier period, citing lower operating results, higher restructuring charges, and transaction costs associated with the acquisition of Scripps.
Revenue, however, soared, reflecting the boost the company will get from its transaction. Revenue in the first quarter came to nearly $2.31 billion, up 43% from $1.61 billion in the year-earlier quarter. On a pro forma basis, Discovery said, total company first quarter revenues grew 10%, with revenue growing 26% at its international holdings, and 10% at its domestic cable operations.
David Zaslav, CEO of the company, said its broader array of media properties would help going forward. “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,” he said in a prepared statement.
Revenue at the company’s U.S. networks increased 42%, to $1,17 billion. Excluding the impact of the Scripps buy, revenue rose 3%, with distribution and advertising revenues up 2% and 4%, respectively. Without the merger, revenue for the first quarter grew 2%, driven by 2% distribution growth and 2% advertising growth, the company said.
More to come….