Discovery Communications Q2 Results Miss Estimates, Cuts Full-year Outlook

(RTTNews) - Discovery Communications Inc. (DISCA, DISCB, DISCK) Tuesday reported a higher second-quarter profit, as revenues climbed 30 percent, driven by growth in International and U.S. Networks. However, earnings per share and revenues missed analysts' expectations. The company also slashed its profit and revenue outlook for full year 2013.

In the second quarter, the company's net income available to stockholders climbed to $300 million or $0.82 per share from $293 million or $0.76 per share in the previous year.

On average, 26 analysts polled by Thomson Reuters expected earnings per share of $0.90 for the quarter. Analysts' estimates typically exclude one-time items.

Discovery, whose television networks include Discovery Channel, TLC and Animal Planet, reported total revenues of $1.47 billion, up 30 percent from last year's $1.13 billion. Analysts estimated revenues of $1.48 billion for the quarter.

Excluding impact of licensing agreements, newly acquired businesses and foreign currency fluctuations, total revenues increased 10 percent.

The company said its revenue growth was driven by 61 percent jump at International Networks and a 13 percent rise at U.S. Networks. U.S. Networks' revenues were driven mainly by advertising and distribution revenue growth. International Networks' revenues were up as advertising revenues surged 119 percent and distribution revenues climbed 29 percent from a year earlier.

David Zaslav, president and chief executive officer of the company said, "Discovery's strong operating and financial momentum continued during the second quarter as we further capitalized on the organic growth opportunities across our portfolio while beginning to take advantage of the benefits that our recent strategic acquisitions provide."

Total costs and expenses advanced to $903 million from $638 million in the prior year.

During the period, the firm repurchased 7.77 million shares of common and preferred stock for an aggregate purchase price of $521 million.

For full-year 2013, the company now expects net income available to stockholders in the range of $1.10 billion to $1.15 billion, down from the previous outlook of $1.20 billion to $1.30 billion.

Total revenues are currently anticipated to be between $5.550 billion and $5.625 billion, compared to the $5.575 billion to $5.700 billion projected earlier.

Analysts are looking for earnings of $3.35 per share, on revenues of $5.58 billion.

According to the firm, the revised outlook incorporates the impact of the purchase price allocation associated with the SBS transaction, current foreign exchange rates for revenues and expenses and current share price for mark-to-market equity-based compensation calculations.

DISCA closed Monday's trading at $84.41. In Tuesday's pre-market, the stock is down 1.73 percent to $82.95.