Discovery Earnings ‘Phenomenal,’ Despite Oprah: Analyst
Is Oprah Winfrey to blame for Discovery Communications’ lackluster first-quarter earnings? The cable giant, which owns Discovery Channel, TLC, and Animal Planet, reported that earnings slipped 28 percent, with net income down to $221 million, or 57 cents a share, from $305 million, or 74 cents a share a year ago.
Revenue rose 16 percent to $1.10 billion, but losses at the new joint venture overshadowed the growth.
“I think there’s too much focus on the Oprah Winfrey Network losses,” said David Joyce, a senior analyst at Miller Tabak.
Joyce said the only negative surprise was that the company is now absorbing all of the OWN losses, but he maintained that the network as a whole had “phenomenal” growth in advertising and distribution revenues, registering increases of 13 percent in the U.S. and 22 percent internationally.
Joyce added that during the earnings call, CEO David Zaslav said he expects the company to post positive cash flows by the middle of next year.
“They’re growing share, they’re adding networks internationally, and more and more people are getting on the pay-TV platform,” Joyce said. ”The company’s growing both through affiliate fees and advertising ... that’s what we should be focusing on.”
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Disclosure information was not available for David Joyce nor his firm.