Discovery Communications, Inc. has reported revenues of $1,375 million for the third quarter ended September 30, 2013, a growth of 28 per cent over $299 million in the third quarter a year ago, led by 59 per cent growth at international networks and 10 per cent growth at the US networks.
Third quarter net income increased 24 per cent to $255 million as compared to $205 million for the corresponding quarter a year ago, primarily due to the strong operating performance in the current year and improved earnings from equity investments partially offset by increased amortisation associated with purchase price allocation for the SBS transaction.
The US networks’ revenues in Q3 of 2013 increased 10 per cent to $733 million, primarily driven by advertising and distribution revenue growth. Advertising revenue increased 12 per cent mainly due to higher delivery and increased pricing. Distribution revenue increased 10 per cent largely due to increased revenue from licensing agreements and higher rates, as well as from subscriber growth, primarily for networks carried on the digital tier. Excluding the impact of licensing agreements, distribution revenues increased 5 per cent, while total revenues increased 8 per cent over the prior year’s quarter.
International networks’ revenues for the third quarter increased 59 per cent to $620 million, as advertising revenues were up 127 per cent and distribution revenues were up 29 per cent. Excluding newly acquired businesses and foreign currency fluctuations, total revenues were up 18 per cent. Distribution revenues, excluding newly acquired businesses, in local currency terms grew 14 per cent mainly from increased subscribers, most notably in Latin America, and from higher rates, particularly in Latin America and the Asia Pacific, as well as from additional contributions due to the consolidation of Discovery Japan. Advertising revenues, excluding newly acquired businesses, were up 29 per cent in local currency terms, primarily due to increased viewership in Western Europe and higher pricing in Western Europe and Latin America.
Commenting on the Q3 performance, David Zaslav, President and Chief Executive Officer, Discovery Communications said, “Discovery’s strong third quarter results once again demonstrate the breadth and depth of our brands and the myriad of opportunities across our global distribution platform. We are translating the consistent viewership gains we are delivering globally into strong advertising growth both domestically and internationally, while at the same time further leveraging our unique distribution footprint by capitalising on the pay television evolution in many of our markets worldwide. As we invest in the organic growth opportunities across our diverse portfolio, we are also focused on the integration of our recent acquisitions. Building additional long-term growth prospects remains a priority as we deliver sustained financial results and return additional capital to shareholders to further build shareholder value.”