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Discovery Communications has reported financial results for the first quarter ended March 31st 2015.
First quarter revenues of $1,537 million increased $126 million, or 9 per cent, over the first quarter a year ago, led by 10 per cent growth at International Networks and 6 per cent growth at U.S. Networks. Adjusted Operating Income Before Depreciation and Amortisation (“OIBDA”) increased $43 million, or 8 per cent, to $568 million, as 10 per cent growth at US Networks was partially offset by a 2 per cent decline at International Networks. Total Company revenues grew 17 per cent and Adjusted OIBDA grew 14 per cent excluding currency effects, as changes in foreign currency exchange rates reduced first quarter revenue growth by 8 per cent and reduced Adjusted OIBDA growth by 6 per cent. Excluding currency effects, the Eurosport transaction and the consolidation of Discovery Family, total Company revenues increased 6 per cent and Adjusted OIBDA increased 11 per cent.
Discovery’s first quarter net income of $250 million ($0.37 per diluted share) increased $20 million, or 9 per cent, compared to $230 million ($0.33 per diluted share) for the first quarter a year ago, as the strong operating performance in the current year and decrease in stock based compensation expense were partially offset by lower equity earnings, higher interest expense and higher restructuring charges. Adjusted Earnings Per Diluted Share (“Adjusted EPS”), which excludes the impact of amortisation of acquisition-related intangible assets, was $0.42 in the first quarter of this year, up 11 per cent, compared with $0.38 in the same period a year ago. Adjusted EPS increased 17 per cent excluding currency effects, as changes in foreign currency exchange rates reduced first quarter Adjusted EPS by 6 per cent. For the last twelve months, Adjusted EPS was $1.89, up 12 per cent compared with $1.69 in the prior twelve months.
Free cash flow decreased to $29 million for the first quarter, as improved operating performance and a decrease in stock-based compensation was more than offset by the timing of tax payments and higher content payments. Free cash flow is defined as cash provided by operating activities less purchases of property and equipment.
“2015 is off to a great start, as our strategy of investing in and owning world-class content to leverage across our unparalleled global distribution platform continues to drive operating momentum and strong financial results,” said David Zaslav, President and CEO of Discovery Communications. “Despite facing a challenging US marketplace and foreign currency headwinds, Discovery is successfully building market share, expanding our distribution and developing programming that resonates with audiences around the world. I’m extremely pleased with our strong performance this quarter and the numerous opportunities Discovery has in the months and years ahead.”