Summary
Warner Bros. Discovery, Inc. (WBD), filed as Discovery, Inc. for this period, reported a net income of $3 million for the three months ended March 31, 2018. This represents a significant decrease from the $221 million net income reported in the same period of the prior year. The primary driver for this substantial decline was the significant increase in costs and expenses, notably driven by the recent acquisition of Scripps Networks Interactive, Inc. This acquisition, completed in early March 2018, led to a considerable increase in goodwill and intangible assets on the balance sheet, alongside substantial transaction and integration costs impacting the income statement. The company's total revenues saw a healthy increase of 43% to $2,307 million, largely propelled by the inclusion of Scripps Networks' revenues. Distribution and advertising revenues both showed strong year-over-year growth. However, this revenue growth was outpaced by a 87% increase in total costs and expenses, which surged to $2,103 million, primarily due to content rights expenses, restructuring charges, and the depreciation and amortization associated with the acquired assets. Investors should closely monitor the integration progress of Scripps Networks and the realization of expected synergies, as well as the ongoing trends in affiliate subscriber declines.
Financial Highlights
45 data points| Revenue | $2.31B |
| Cost of Revenue | $1.06B |
| Gross Profit | $1.25B |
| SG&A Expenses | $609.00M |
| Operating Expenses | $2.10B |
| Operating Income | $204.00M |
| Interest Expense | $177.00M |
| Net Income | -$8.00M |
Key Highlights
- 1Acquisition of Scripps Networks Interactive, Inc. (Scripps Networks) completed on March 6, 2018, significantly impacting the balance sheet and income statement.
- 2Net income decreased significantly to $3 million from $221 million in the prior year's quarter, largely due to increased costs and expenses, including transaction and integration costs related to the Scripps acquisition.
- 3Total revenues increased by 43% to $2,307 million, primarily driven by the inclusion of Scripps Networks' revenue streams.
- 4Costs and expenses increased substantially by 87% to $2,103 million, outpacing revenue growth, mainly due to content costs, restructuring, and amortization of acquired intangibles.
- 5Goodwill and intangible assets saw significant increases on the balance sheet due to the Scripps acquisition, totaling $13.1 billion and $10.8 billion respectively.
- 6The company's cash and cash equivalents decreased significantly from $7,309 million at year-end 2017 to $812 million at the end of the quarter, largely due to funding the Scripps acquisition.
- 7Debt levels increased, with total debt rising to $19,367 million from $14,785 million at year-end 2017, largely due to new term loans and assumed debt from the Scripps acquisition.