Discovery Communications continued to buck the trend of declining ad sales plaguing its peers, reporting a 1% rise in domestic ad sales in the second quarter.
Overall revenue was flat at $881 million -- U.S. Networks revenue rose 2% to $557 million, offset by a 5% decline at international networks, fueled mostly by unfavorable foreign currency exchange rates. Adjusted operating income before depreciation and amortization rose 13% companywide -- AOIBDA was up 11% at the U.S. Networks, but down 5% at international.
This was the second straight quarter of domestic ad sales increases for Discovery -- it had a 2% increase in the first quarter. In contrast, cable programming peers like Viacom reported a 6% decline in domestic ad revenue in the second quarter and Time Warner Inc., reported a 3% decline in second-quarter ad sales.
Discovery chief financial officer Brad Singer predicted on a conference call with analysts that domestic ad sales in the third quarter would be flat, but said that Discovery is expected to have a strong second half of the year.
Singer maintained the company's full-year 2009 revenue guidance at between $3.375 billion and $3.5 billion. However, the company raised its low-end full-year AOIBDA estimate to $1.35 billion (from $1.325 billion) while maintaining its high-end estimate of $1.4 billion.
Singer added that Discovery expects to spend between $70 million and $80 million on the Oprah Winfrey Network, which is expected to launch early next year. However, the company offered few additional details on OWN.
CEO David Zaslav said that he spent last week in California in meeting with Oprah Winfrey and OWN CEO Christina Norman, adding that the media mogul is "fully engaged" with the network.
Discovery shares were down 13 cents each (0.5%) to $25.26 each in afternoon trading Tuesday.
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