• by Wayne Friedman , May 2, 2019

Discovery’s U.S. advertising revenues grew 4% on a pro forma basis -- slightly better than expected to $1.02 billion -- due to increased pricing, but the company has been impacted by audience declines.

Total distribution revenues were up 4% to $697 million. Total U.S. revenues rose 3% to $1.72 billion.

Todd Juenger, media analyst at Bernstein Research, says U.S. distribution revenues are slowing a bit -- down 1% from the previous quarter. On the positive side, Juenger says advertising revenues are accelerating somewhat -- up from a 3% gain in the previous quarter.

Although it saw steady subscriber gains from virtual/digital pay TV providers -- Hulu and Sling in particular -- it lost some distribution fees from new DirecTV Now subscriptions, he notes.

Discovery’s pro forma growth/change results are as if its $14.6 billion acquisition of Scripps Networks Interactive deal had occurred on January 2017 -- a deal which closed March 2018. Excluding that deal, U.S. ad revenues rose 63%.

International advertising grew 2% to $393 million -- leaving out the Scripps deal and currency fluctuations. When including as if that deal occurred in January 2017, adding currency changes, ad revenues were down 6%. This also factoring in unfavorable comparisons due to the Winter Olympics in January 2018.

Analysts says Discovery’s international financial results missed on expectations. Discovery stock price in early Thursday morning trading was down 1.3% to $30.48.

Discovery’s total advertising revenue (international and U.S.) was up $1.4 billion from $1 billion. Overall company revenue grew 17% to $2.7 billion, with net income at $418 million versus $3 million in the first-quarter 2018.