Dollar Pushes Discovery Net Down in 2Q
Discovery Communications reported lower second quarter profits as the strong dollar hurt its international businesses and domestic ad revenue was flat.
Net income fell 25% to $286 million, or 44 cents a share, from $379 million, or 54 cents a share. The company attributed the decline in part to the strong dollar and charges caused by restructuring and content impairments.
Revenues rose 4% to $1.7 billion. Discovery said revenue would have been up 11% excluding currency effects. Domestic ad revenues were unchanged.
The earnings were a bit below Wall Street estimates, but revenue was in line with expectations.
Adjusted operating income for Discovery’s U.S. Networks was up 7% to $496 million. Revenues rose 5% to $814 million.
Domestic ad revenue was $447 million, essentially the same as last year’s $446 million. The company said higher pricing was offset by lower ratings. Domestic distribution revenue was up 12% to $357 million.
Operating income for Discovery’s international networks was down 11% to $266 million.
“Driven by our unmatched portfolio and steady growth around the world, Discovery’s strong start to the year continued in the second quarter,” said CEO David Zaslav. “We have carried that momentum into the third quarter and signed three landmark deals - the historic agreement for the Olympic Games in Europe, our agreement to acquire full ownership of Eurosport and our comprehensive long-term renewal with Comcast – that will bolster Discovery’s position and market share for years to come.”
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.