Discovery Communications said second-quarter profit rose 42.6%, largely on the performance of U.S. cable networks like TLC, Discovery Channel and Investigation Discovery, which scored decent gains in the revenue they generate from distribution by cable and satellite carriers.
The Silver Spring, Md., owner of cable networks said its net income in the quarter rose to $408 million, or 66 cents per share, compared with $286 million, or 44 cents per share in the year-earlier period.
Revenue rose 3% to about $1.71 billion, compared with $1.65 billion a year earlier.
The results could buoy short term impressions of Discovery’s operations. In May, the company unveiled plans to save $120 million annually through buyouts and potential layoffs as it works to get more lean while it grapples with the popularity of digital media and creating content for new viewer behaviors. “Discovery’s 2Q results highlight the ability of the company to show solid growth in the U.S.,” noted Michael Nathanson, an analyst with independent firm MoffettNathanson, in a research note Tuesday.” The question from here is: can it last?”
The company said revenues from its U.S. TV networks rose 7% to $873 million, driven by 8% distribution growth and 5% advertising growth. It cited higher rates for the increase in distribution revenue and higher pricing for the ad-revenue gains.
At Discovery’s international networks, revenue fell 1% to $790 million, owing to fluctuations in foreign currency exchange rates. . Distribution revenues, excluding the impact of currency effects, grew 10%, largely on higher rates in regions like Europe and Latin America. Advertising revenues, excluding currency effects, rose 5%, primarily due to higher volume and ratings in Southern Europe, the company said.