Discovery Communications Second-Quarter Profit Rises
Discovery Communications on Tuesday reported better-than-expected second-quarter earnings amid a revenue increase driven by higher advertising and affiliate fees.
The cable network company, led by CEO David Zaslav, owns such channels as Discovery, TLC, Animal Planet, ID and OWN: The Oprah Winfrey Network. Its international expansion again helped fuel its growth.
Discovery Communications' quarterly profit of $293 million was up 15 percent compared with the year-ago period. Revenue rose 7 percent to $1.14 billion, or 10 percent when excluding negative currency impacts. Wall Street analysts had on average predicted earnings of $269 million on revenue of $1.16 billion.
Advertising revenue rose 8 percent, with a 7 percent gain in the U.S. and an 11 percent jump in international territories. Affiliate fees rose 8 percent in the U.S. and overseas.
“Discovery’s consistent focus on investing in our global platform, building new brands and developing additional growth opportunities resulted in continued strong operating results during the second quarter," said Zaslav. "The steps we have taken to broaden our international content offerings, along with the continued evolution of pay TV globally, are driving international expansion, while domestically we are generating significant returns from the sustained programming initiatives and audience growth across our younger networks."
Revenue rose 6 percent at the company's U.S. networks, while its international channels produced 10 percent growth.
Ratings momentum at key Discovery networks rose in the latest quarter, but others saw declines.
"Primetime live-plus-same-day ratings were led by ID and Animal Planet -- up 25 percent and 17 percent, respectively," Evercore Partners analyst Alan Gould said before the earnings report. "Discovery was down 14 percent, TLC fell an estimated 14 percent, and nonconsolidated OWN was up 14 percent."
Zaslav highlighted that "our financial momentum and strong balance sheet have enabled us to accelerate the pace of our capital returns as we continue to invest in both new and existing strategic growth initiatives to further build shareholder value.” For example, Discovery bought back 8.5 million shares of its own stock for $404 million in the second quarter.