In the first quarter of apples-to-apples financials since it closed the Scripps Networks Interactive acquisition, Discovery delivered solid advertising gains and beat Wall Street profit forecasts.
The company reported total revenue in the second quarter of just shy of $2.9 billion, which met estimates. Excluding a tax benefit, adjusted earnings per share came in at $1.31, ahead of the $1.12 consensus from analysts.
The revenue figure inched up 1% compared with the previous year’s quarter. A 5% increase in U.S. networks revenues was partially offset by a 3% decrease in international networks revenues and a significant decrease in “other” revenues due to the sale of the education business.
U.S. Networks revenues for the quarter increased 5% to just shy of $1.9 billion million compared with the prior year. Advertising revenue rose 6% (at the top end of the company’s guidance) and distribution revenues increased 5%, with those gains partially offset by a $14 million decrease in other revenues. Discovery said the increase in ad revenues was primarily driven by increases in pricing and inventory as well as the continued monetization of digital content offerings. Those advances were partially offset by lower overall ratings and the impact of audience declines in the aggregate on linear networks.
The increase in distribution revenues was primarily driven by increases in contractual affiliate rates and additional carriage on streaming platforms, partially offset by a decline in overall subscribers, the company said. Total portfolio subscriber numbers in June 2019 were 3% lower than June 2018, while subscribers to fully distributed networks were flat.
Discovery closed its $14.6 billion acquisition of Scripps in March 2018. The deal gave the company control of HGTV, Food Network and several others. As of June, Discovery’s total portfolio of networks attracted more female viewers aged 25-54 than that of any other company.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.