Unscripted shows from TV channels like Food Network, TLC and HGTV helped Discovery beat Wall Street’s profit expectations despite a slight revenue dip fueled by the coronavirus.
The broadcasting giant said its portfolio of TV brands lost 6 percent of its total subscribers from the first quarter of 2019. Among its biggest channels, including Discovery, TLC, Food Network and HGTV, the drop was about 4 percent. Advertising revenue, which began in March, was flat at $1.03 billion in the first quarter.
Nevertheless, Discovery has been coming up with creative ways to air new shows amid the lockdown, including a host of cooking and home-improvement episodes.
Food Network’s Guy Fieri has gotten takeout at some of his favorite dives, for example, while HGTV has tapped celebrities like Brad Pitt and Melissa McCarthy to renovate the spaces of friends and relatives.
While Discovery Chief Executive David Zaslav admitted the industry faces an “unprecedented challenge” because of the pandemic, he told investors on Wednesday that his company is well-positioned to hold its own.
“Our business has not missed a beat,” Zaslav said, explaining that the company’s operations and production of its unscripted series are easily adapted to remote working because of Discovery’s investments in technology and cloud-based work networks.
On Monday, Food Network will debut a show called “Amy Schumer Learns to Cook,” which is being filmed by the comedian’s nanny. On Sunday, TLC will launch a new dating series, “Find Love Live,” which will feature quarantined daters who meet through video. Viewers can rip and cheer daters through social media.
Zaslav said many of Discovery’s channels have delivered remotely produced programs, including the successful preview of the new Magnolia Network digital outlet led by former HGTV stars Chip and Joanna Gaines, which turned in more than 2.3 million viewers on April 26.
“Many of our networks are reaching all-time highs,” Zaslav said, pointing to triple-digit growth at HGTV and Food Network. “We really like our hand.”
During the first quarter ended March 31, net income dipped 2 percent, to $377 million, or 55 cents a share, from $384 million, or 53 cents a share, a year earlier. Adjusted EPS totaled 87 cents.
Revenue slid 1 percent, to $2.68 billion, but was unchanged excluding foreign exchange.
Wall Street expected adjusted EPS of 84 cents on revenue of $2.72 billion.
Shares of Discovery fell 2.3 percent in early-day trading Wednesday.
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