Discovery Reports Small Q2 Profit Gain

SILVER SPRING: Discovery Communications had a slight increase in earnings for its second quarter, though a 30-percent jump in revenues.

Net income increased 2 percent to $300 million. This was primarily due to the strong operating performance in the current year being offset by higher interest and texts, as well as increased amortization from the SBS transaction. 

Revenues grew to $1.5 billion. This revenue growth was led by a 61-percent increase at the international networks and a 13-percent increase at the U.S. networks. The international networks posted revenues of $652 million, with ad revenues up 119 percent and distribution revenues up 29 percent. At the U.S. networks, revenues were $793 million, thanks to 10-percent growth in advertising and 17-percent growth in distribution revenues.

Discovery did reduce its forecast for the year. The company is expecting revenue of about $5.5 billion to $5.6 billion.

David Zaslav, Discovery’s president and CEO, said, "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. Our sustained commitment to producing captivating content and the further expansion of global pay-TV markets combined to once again drive audience and revenue growth across our unique distribution platform. The consistent financial gains we are delivering, along with the strength of our balance sheet, enable us to return significant capital to our shareholders while thoughtfully investing in our diverse brands and platforms in order to further build additional long-term growth opportunities."

Zaslav also announced that OWN: Oprah Winfrey Network is generating positive cash flow now. The network turned a profit in the first half of the year, six months ahead of schedule, and is now able to begin paying back Discovery for its investment.