Discovery Communications’ profit and revenue rose in the second quarter thanks to higher ad revenue at its U.S. and international networks.
Although revenues increased 30% to US$1.47 billion from $1.13 billion last year, earnings per share and revenues fell short of analysts’ expectations due to higher programming and marketing costs at its U.S. cable unit. Analysts had expected $1.48 billion, according to Thomson Reuters.
Net income went up to $300 million (or 82 cents per share) compared with $293 million (77 cents per share) in the same period last year.
Excluding the impact of licensing agreements, newly acquired businesses and foreign currency fluctuations, total company revenues were up 10%.
The U.S. Networks division’s revenue was driven by ad and distribution growth. Ad revenue went up 10% due to higher delivery and prices. Distribution went up by 17% thanks to $37 million in revenue from licensing agreements.
The International Networks division’s revenue increased 61% to $652 million. Ad revenue went up 119% and distribution revenues were up 29%. Excluding newly acquired businesses and foreign currency fluctuations, total revenues went up 14%. Distribution revenues grew 14% thanks to increased subscribers mainly in Latin America and the consolidation of Discovery Japan.
Ad revenue, excluding newly acquired businesses, went up 21% due to higher pricing and delivery in Latin America and increased viewership and higher pricing in Western Europe. Other revenue, excluding newly acquired businesses, was down by $8 million due to revenue recognized in the prior year associated with services provided to Discovery Japan.
“Discovery’s strong operating and financial momentum continued during the second quarter as we further capitalized on the organic growth opportunities across our portfolio while beginning to take advantage of the benefits that our recent strategic acquisitions provide,” said Discovery’s president and CEO David Zaslav (pictured above) in a statement.
Discovery’s cable networks include Discovery Channel, TLC, Science, Velocity and Animal Planet.