Discovery Communications, Inc. (DISCA, DISCB, DISCK) reported Tuesday a 15 percent increase in second-quarter profit, benefited by strong growth in advertising and distribution revenues in both US and international regions. Quarterly earnings per share topped Wall Street expectation, while revenue missed their view. Further, the media and entertainment company maintained its fiscal 2012 earnings and revenue forecast.
Second-quarter net income attributable to stockholders was $293 million or $0.76 per share, higher than prior year's $254 million or $0.62 per share.
On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.70 per share. Analysts' estimates typically exclude special items.
The company attributed the profit growth primarily to strong operating performance and lower taxes primarily due to a reorganization of certain operations, partially offset by the impact of foreign currency fluctuations.
Revenues grew 7 percent from last year to $1.142 billion, while analysts expected revenues of $1.16 billion. Excluding the impact of foreign currency fluctuations, total company revenues increased 10 percent.
In the quarter, revenues at U.S. Networks segment increased 6 percent primarily driven by advertising and distribution revenue growth. Advertising benefited from higher pricing and sellouts, partially offset by the absence of non-recurring revenue items from the prior year. Distribution segment was benefited by higher rates and subscriber growth primarily from networks carried on the digital tier as well as from additional licensing revenues under existing agreements.
The company's revenues from International Networks segment grew 10 percent. Excluding the impact of foreign currency fluctuations, total revenues increased 19 percent. In the quarter, advertising revenue in local currency climbed 22 percent.
President and Chief Executive Officer David Zaslav said, "The steps we have taken to broaden our international content offerings, along with the continued evolution of pay-tv globally, are driving international expansion, while domestically we are generating significant returns from the sustained programming initiatives and audience growth across our younger networks."
Meanwhile, revenues from education and other areas dropped 5 percent due to lower revenue from Creative Sound Services.
Adjusted operating income before depreciation and amortization or OIBDA, a key earnings metric, increased 6 percent to $543 million driven by growth at both U.S. Networks and International Networks.
Looking ahead to the full-year 2012, Discovery continues to expect attributable net income in a range of $1 billion to $1.10 billion, and revenue between $4.55 billion and $4.65 billion. Analysts expect earnings of $2.75 per share on revenues of $4.60 billion.
Adjusted OIBDA for the year is expected between $2.125 billion and $2.200 billion.
Discovery shares closed Monday's trading at $50.93.
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