Discovery Gets Government OK to Buy Scripps; TLC and ID Lead Parent to Q4 Earnings Win

Merger is now on you, Ireland

Last Updated: February 27, 2018 @ 6:22 AM

Discovery Communications revealed its fourth-quarter and full-year 2017 financial results on Tuesday morning — and also, a nice surprise: The U.S. Department of Justice has given Discovery the go-ahead on its nearly $15 billion purchase of Scripps Networks Interactive.

“We are pleased to have passed this significant regulatory milestone on our path to acquire Scripps Networks Interactive,” said David Zaslav, president and CEO, Discovery. “The conclusion of the Department of Justice’s investigation is an integral step toward closing our transaction. We look forward to combining these two great companies to the benefit of our enthusiast audiences around the world.”

Zaslav & Co. expect the deal will close by the end of next month. Final approval is now in Ireland’s hands.

Wall Street had forecast Discovery Q4 earnings of 41 cents per share on $1.79 billion in revenue, according to a consensus compiled by Yahoo Finance. The company actually reported 47 cents of adjusted earnings per share (EPS) on $1.864 billion in revenue.

Though earnings declined year over year, cable channels TLC and ID were integral in beating media analysts’ expectations at the top and bottom lines for the recently close 90-day period. Overall, Discovery revenues rose 11 percent across the quarter — both domestic and international sales increased double digits for the company.

For the full year, revenues rose 6 percent overall and adjusted EPS actually increased 11 cents.

“2017 was an historic year for Discovery. We took significant steps to position ourselves for success in a changing industry, while driving growth from our traditional linear business and accelerating our investments in new growth areas like digital and mobile in an effort to reach superfans on every screen,” Zaslav said of his financials. “Solid global advertising and distribution revenue growth helped us achieve our 2017 strategic and financial objectives. Additionally, we remain excited by the prospects for a combined Discovery and Scripps Networks.”

DISCA stock closed at $25.17 on Monday, up almost 5 percent per share. The regular U.S. trading day begins again at 9:30 a.m. ET this morning.

Discovery executives will host a conference call at 8:30 a.m. ET to discuss the quarterly and annual results in greater detail.