Discovery Communications reported that its second quarter profit was lower than the average estimates of analysts. It was attributed to the higher operating expenses at its US cable unit. The media company owns cable networks such TLC and the Animal Planet.
The company’s net income increased to $300 million or 82 cents a share. During the same quarter last year, it got profit of $293 million or 77 cents a share. Its adjusted EPS of 83 cents a share was below the estimates made by analysts by 7 cents. The company’s shares fell around 1 percent in pre-market trading.
Analysts expected better profitability from the company’s US networks. Its advertising was up 10 percent but it was dragged down by the higher than expected operating expenses. Programming and marketing costs were up and they hurt the bottom line of Discovery.
Discovery’s quarterly results report showed that its operating expenses increased 17 percent at its US unit. This offset revenue growth from the same division. Its revenue went up 30 percent to $1.47 billion. Analysts estimated it to be $1.48 billion. The US Networks division’s revenue was driven by distribution and ad growth. Distribution gained 17 percent with $37 million in revenue from licensing agreements. Ads increased 10 percent due to higher delivery and prices.
Discovery’s International Networks division’s revenue went up 61 percent to $652 million. Ad revenue increased 119 percent and distribution revenues gained 29 percent. If newly acquired businesses and foreign currency fluctuations were excluded, total revenues went up 14 percent.
Net income of Discovery increased to $300 million or 82 cents per share, compared to $293 million the previous year. It got higher ad revenue at tits US and international networks. When the impact of licensing agreements, foreign currency fluctuations and newly acquired businesses were excluded, the company’s revenues were up 10 percent.