Discovery Communications reported a loss of net income in its second quarter despite a 2.7% gain in quarterly revenue driven by increases in its distribution sector.
The U.S. cable network group – owner of Animal Planet, TLC and Discovery Channel – saw revenues for its U.S. operations jump 5% to $814 million, driven by a 12% climb in distribution due to higher rates and the consolidation of Discovery Family, the company said. Its international networks slowed to a gain of 1% during the second quarter, having posted a 10% increase in international networks and a gain of 6% in local markets in its first quarter.
However, the company’s adjusted operating income before depreciation and amortization decreased to $680 million, a 2% loss, as its 7% surge at home was counterbalanced by an 11% decline in the international markets alongside a small operating loss within its education division – declining to $40 million from $42 million.
The decrease in net income to $286 million, or 44 cents per share, from last year’s $379 million, or 54 cents per share, was primarily affected by higher foreign currency losses due to slowing international growth coupled with restructuring and content impairments, the media conglomerate said.
On an earnings conference call, Discovery Communications CFO Andy Warren confirmed the content impairment charge resulted from the cancellation of TLC’s 19 Kids and Counting.
Discovery Communications’ total revenue swelled to $1.65 billion from $1.61 billion.
Company president and CEO David Zaslav (pictured) said the network had signed three landmark deals carrying into the third quarter that include the agreement for the Olympic Games in Europe, the full-ownership acquisition of Eurosport, and the long-term renewal with Comcast set to strengthen Discovery’s future market share.
“I am pleased with the progress we made in the first half of the year and look forward to building our stable of content, IP and world-class platforms to drive viewer engagement and meaningful value to distributors, advertisers and shareholders now and into the future,” he said in a statement.