Discovery Holding Co. shares surged more than 6% Monday after the cable network reported strong second quarter results.
Discovery stock soared as high as $19.61 per share (up $1.23 per share or 6.7%) before closing up $1.14, or 6.2%, at $19.52 a share.
Discovery Holding, which includes cable network group Discovery Communications Inc. and Ascent Media Group, reported revenue of $863 million (up 10%) and adjusted operating income before depreciation and amortization (AOIBDA) of $315 million (up 19%).
The bulk of that growth was from DCI. According to Discovery Holding, DCI reported revenue growth of 6% (to $549 million) and AOIBDA growth of 16% (to $285 million). Excluding the Travel Channel—which was transferred to Cox Communications last year in exchange for its 25% interest in DCI—and revenue and AOIBDA growth at DCI was 11% and 19%, respectively.
In a statement, Discovery Holding said the results were driven by gains in distribution and advertising revenue. For the period, Discovery Holding said that distribution revenue grew 14% in the period largely from higher rates across its fully-distributed networks and subscriber growth at its emerging networks. Advertising revenue in the period increased 9% from higher sellouts and pricing, partially offset by lower ratings, primarily at TLC.
Discovery Holding and Advance/Newhouse Communications are set to combine their interests in DCI later this year to make the group of networks a truly public company. Discovery Holding shareholders are expected to vote on the matter at their annual meeting on Sept. 16.