Discovery Communications said fourth-quarter profit fell due to a series of one-time charges, even as advertising and distribution revenues climbed both at its U.S. properties and abroad.
The owner of the Discovery Network, TLC and OWN cable outlets, which said Tuesday it has obtained clearance from the Department of Justice to purchase Scripps Networks, said net income fell to a loss of $1.14 billion, or $1.99 per share, citing a goodwill impairment charge of $1.32 billion related to its European operations, and a charge of $59 million related to costs related to the Scripps acquisition. In the year-earlier period, Discovery reported a profit of $304 million or 51 cents per share.
Revenue in the period climbed 11% to more than $1.86 billion, compared with $1.67 billion, with growth evident at both the company’s U.S. and European properties.
“Solid global advertising and distribution revenue growth helped us achieve our 2017 strategic and financial objectives,”said David Zaslav, Discovery’s chief executive, in a prepared statement. “Additionally, we remain excited by the prospects for a combined Discovery and Scripps Networks.”
At Discovery’s U.S. operations, fourth-quarter revenues rose 10%, to $892 million. The company cited 7% increase in revenue related to distribution, and an 8% increase in revenue related to advertising. driven by 7% distribution growth. Advertising was strong at both the TLC and ID networks, the company said, but subscriptions to its overall portfolio of networks fell 5%.
Revenue rose at Discovery’s overseas holdings. Revenue at its international networks rose 13% to $927 million. Distribution revenues grew 10%, mostly due to higher rates in Europe following
further investment in sports content, and higher contractual rates in Latin America. Advertising revenue rose 5%, mostly due to higher volume and pricing across key markets in Europe and higher volume in Latin America, the company said.