Discovery Reports Lower First-Quarter Net Income

April ad revenue down 20%
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Discovery reported lower first quarter profits as international revenue declined.

Net income was down 2% to $377 million, or 55 cents a share, from $384 million, or 53 cents a share a year ago.

Revenue was down 1% to $2.683 billion.

At Discovery’s U.S. Networks, adjusted operating income before depreciation and amortization was down 4% to $1.02 billion. Revenue was flat at $1.8 billion.

Ad revenues were flat at $1.03 billion and distribution revenue were up 2% to $708 million. Total subscribers were down 6% in March 2020 compared to March 2019. Subscribers to Discovery’s fully distributed networks were down 4%.

CFO Gunnar Wiedenfels said that in April domestic ad revenues were down 20%. He said May and June look slightly better based on business booked so far, but he noted that the situation was fluid.

Discovery’s international networks posted operating income of $207 million, down 5% as revenue slid 3% to $923 million.

"The world is facing an unprecedented challenge and I want to express our profound gratitude to the medical workers and front-line responders who are risking their personal safety every day during this fight with COVID-19,” said CEO David Zaslav.

“I am also enormously proud of Discovery's employees who have pulled together and stepped up with resilience, heart and creativity. They continue to nourish our viewers at a time when our trusted brands and beloved personalities are a unique source of comfort and familiarity,” Zaslav said. “As we navigate through the remainder of 2020, our priority remains on the well-being of our employees, clients, customers, and production partners. Furthermore, we will continue to focus on maintaining a healthy balance sheet with robust liquidity and investing in our businesses to position ourselves for long-term growth amid the changes in the pay-TV landscape."

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