Tuesday, Discovery Communications, Inc. (DISCA, DISCB,DISCK) reported a significant rise in profit for the second quarter, reflecting a one-time gain from the sale of 50% of Discovery Kids channel. The company's earnings came in well ahead of analysts' consensus. Discovery Communications also reaffirmed its full year revenue outlook.
Discovery Communications' net income available to shareholders for the second quarter was $183 million or $0.43 per share, compared to $43 million or $0.16 per share in the previous year. The second-quarter, 2009 results include a one-time gain on business disposition of $252 million.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.32 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter were $881 million, compared to $885 million a year ago. Ten analysts had a consensus revenue estimate of $881.42 million for the quarter.
By segment, revenues from U.S. Networks increased 2% to $557 million from $544 million last year primarily driven by distribution and advertising revenue growth. Revenue from International networks declined 5% to $283 million from $298 million a year ago, from a $34 million unfavorable impact from foreign currency fluctuations resulting in a 13% decline in advertising revenue and slightly lower distribution revenue.
Commerce, Education and Other revenues declined to $40 million from $41 million in the previous year as increased education revenues from higher streaming volumes was offset by lower commerce revenues as a result of the transition to a new licensing model.
Revenues from Distribution increased to $426 million from $418 million last year. Advertising revenues for the quarter declined to $368 million from $378 million in the previous year. Other revenues declined to $87 million from $89 million a year ago.
Adjusted operating income before depreciation and amortization grew 13% to $381 million, driven by a 11% increase at U.S. networks partially offset by a 5% decline at International networks due primarily to a $12 million unfavorable impact from foreign currency fluctuations.
For the six-month period, net income available to shareholders increased to $302 million or $0.71 per share from $77 million or $0.28 per share in the same period of the previous year. Total revenues for the period increased to $1.70 billion from $1.69 billion last year.
Looking forward, the company reaffirmed its revenue guidance between $3.37 billion and $3.50 billion for the fiscal 2009. Analysts currently estimate the company to report revenues of $3.46 billion for the full year.
Net income available to stockholders is expected in the range of $500 million to $600 million, the increase to primarily reflect the net of tax gain on the Discovery Kids transaction. Previously, the company expected net income between $475 million and $575 million.
DISCA is currently trading at $25.36, down 0.03 or 0.12%, on a volume of 1.59 billion shares on the Nasdaq.
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