International Networks Push Discovery Profits Highter In Q2

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Boosted by big gains at its international operations, Discovery Communications posted higher second-quarter profits.
Net income rose to $254 million, or 62 cents a share, from $148 million, or 25 cents a share a year ago. Excluding one-time items in 2010, net income was up 20%, the company said. Revenues rose 11% to $1.07 billion
The results were slightly better than Wall Street forecasts.
"Discovery continues to deliver strong financial results, particularly across our unique international platform, as the depth and breadth of our content assets have enabled the company to capitalize on the sustained ad market strength worldwide as well as take advantage of the evolution of pay-tv across the globe," David Zaslav, president and CEO said in a statement.
Zaslav said the gains came despite making strategic investments. "Bolstering our flagship networks, building additional growth assets across the company and leveraging the unparalleled distribution platform we built over the last 25 years remain our top priorities, and we are focused on doing so while delivering sustained financial results and returning additional capital to our shareholders," he said.
The company said that for the full year, it expects total revenue to total between $4.075 billion and $4.175 billion, ahead of the previous guidance of $4.03 billion and $4.13 billion. The company said it expects net income to be between $1 billion and $1.075 billion.
Discovery announced it was adding $1 billion to its share repurchase program. During the quarter, the company bought about $210 million worth of stock under its $1 billion stock repurchase plan. It bought another $127 million worth of shares from July 1 through August 3.
Operating income for Discovery's U.S. networks rose 4% to $395 million. Excluding the results of Discovery Health, which has become the OWN Network as part of joint venture with Oprah Winfrey, operating income grew 7%.
Revenues rose 6% to $660 million, with advertising ahead 10% to $361 million and distribution up 4% to $273 million. The company said ad revenue rose due to increased pricing and higher sellouts, plus $8 million from non-recurring revenue items. Adjusting for the OWN deal puts ad revenues up 13%, compared to 6% a year ago, the company said.
Profit margin at the U. S. networks was 60%, essentially even with 61% last quarter.
Discovery's international networks registered a 31% increase in operating income to $173 million on a 20% increase in revenue to $368 million.