Discovery said third-quarter profit increased despite a slump in ad revenue at both its U.S. and international operations, as the company enjoyed a tax benefit and relied on cost-cutting maneuvers to navigate through conditions caused by the coronavirus pandemic.
The owner of the TLC, Food Network, HGTV and Discovery cable outlets said revenue fell 4% — with U.S. advertising sales down 8% — but cut down on expenses and narrowed tax expenses from the year-earlier period. That helped buoy a 15% increase in the net income available to the company, which rose to $300 million, or 44 cents a share, compared with $262 million, or 35 cents a share, in the year-earlier quarter. Earnings totaled 81 cents a share after being adjusted for amortization costs and restructuring costs.
“In the midst of macroeconomic uncertainty with the ongoing COVID pandemic, as well as the continuing evolution of our industry, we remain focused on positioning Discovery for long-term growth and shareholder value creation through the execution of our strategic priorities, including our next generation initiatives,” said David Zaslav, chairman and CEO of the company, in a prepared statement.
In the U.S., revenue fell 4% due to shortfalls in advertising and despite increases in fees from distributors. Discovery said subscribers to its fully distributed networks were down 4% in the period, while subscribers to its total portfolio of networks was off 6%. Revenue from international operations fell 5%.
The company has positioned itself as an alternate to other media companies by providing unscripted programming focused on broad-niche topics like food or lifestyle, while bolstering its holdings with investments in providing sports to European audiences. During an investor call Thursday, Zaslav said the Discovery planned to unveil a “roadmap” for its plans to unveil a new streaming-video service in early December.
More to come….