Discovery Beats Q2 Earnings Forecasts As It Focuses On Overseas Expansion
The Q2 report steers clear of hot-button issues, including the ratings decline at the flagship Discovery Channel and the latest developments at OWN. And the numbers don’t ring any obvious alarm bells. Discovery reported net income of $293M, up 15.4% vs the period last year, on revenues of $1.14B, +7%. The revenue number is just a tad short of the $1.16B that analysts forecast. But earnings at 76 cents a share are well ahead of the 70 cents that the Street expected. The U.S. networks held their own with revenues +6% to $700M. Ad sales increased 7% — it would have been 9% if you factor out some non-recurring items last year — while fees from pay TV distributors increased 8%. The company says that’s due to a combination of its rising overall rates and sub growth for some of its smaller networks that cable and satellite companies carry on special tiers. Meanwhile, revenues from international networks were +10% to $405M — and if it weren’t for currency fluctuations would have been +19%, Discovery says. “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,” CEO David Zaslav says. Discovery didn’t change its earnings guidance for 2012. Its company’s shares are +24.3% so far in 2012 and nearly +28% over the last 12 months.