Discovery Communications has reported financial results for the first quarter ended March 31, 2017.
“Improved ratings across many of Discovery’s key distinctive programs and brands, coupled with strong global distribution growth, led to solid organic growth in the first quarter,” said president and CEO David Zaslav.
“Beyond our linear business, we continue to focus on new strategic partnerships and investments to help drive our multiplatform growth strategy and ensure that we reach our global superfans on every screen.”
First quarter revenues of $1,613 million increased 3% compared to the prior year primarily due to 5% growth at International Networks and 3% growth at US Networks.
Adjusted Operating Income Before Depreciation and Amortization increased 5% to $603 million primarily due to 6% growth at US Networks and 7% growth at International Networks. Excluding currency effects, total company revenues grew 5% and Adjusted OIBDA grew 4%.
First quarter net income available to Discovery Communications decreased 18% to $215 million as higher operating results and lower income tax expense were more than offset by higher losses from equity investees primarily due to the timing of its solar investments, which had a negative impact on net income in the first quarter but are expected to have a positive impact on net income for the full year, a $34 million (or $0.06 per share) after-tax debt extinguishment charge and higher restructuring charges than in the prior year.
Diluted earnings per share decreased $0.05, or 12%, to $0.37 due to lower DCI Net Income, partially offset by fewer shares outstanding. Adjusted Earnings Per Diluted Share (“Adjusted EPS”), which excludes the impact of amortization of acquisition-related intangible assets, decreased $0.05, or 11%, to $0.41. Adjusted EPS excluding currency effects decreased $0.05, or 11%, and Adjusted EPS excluding currency effects and the debt extinguishment charge increased $0.01, or 2%.
Free cash flow increased to $208 million for the first quarter of 2017 from $47 million in the prior year as cash flow from operations increased significantly to $255 million from $62 million while capital expenditures increased to $47 million from $15 million.
Cash flow from operations increased primarily driven by improved operating results and lower cash taxes due partially to the timing of cash tax payments. Capital expenditures increased primarily due to timing and higher technology and infrastructure spending. Free cash flow excluding the impact of currency effects increased 167%. Free cash flow is defined as cash provided by operating activities less purchases of property and equipment.
