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Discovery profit misses Street on weak ad sales, strong dollar

Published 08/05/2015, 07:52 AM
© Reuters. To match Special Report USA-HEALTHCARE/WELLNESS

(Reuters) - Discovery Communications Inc (NASDAQ:DISCA), the owner of the Discovery Channel and Animal Planet, reported quarterly revenue and profit below analysts' expectations, hurt by lower ad sales and a strong dollar.

The company also forecast full-year revenue, excluding currency, to grow in the high single to low double digits and adjusted profit to rise in low double digit in percentage terms.

Revenue from ad sales, which accounts for almost half of total revenue, fell 3.6 percent in the quarter ended June 30.

Up to Tuesday's close, the dollar had risen more than 20 percent against a basket of major currencies in the past 12 months.

Last month, Discovery said it would take full ownership of sports broadcaster Eurosport for 491 million euros from French media group TF1 Group and also renewed a distribution agreement with Comcast Corp (NASDAQ:CMCSA).

Discovery said revenue from international networks rose 1 percent, while revenue at its U.S. networks rose 4.9 percent.

International networks accounted for nearly half of revenue in the quarter.

However, net income available to the company fell to $286 million, or 44 cents per share, in the second quarter ended June 30, from $379 million, or 54 cents per share, a year earlier.

Revenue rose 2.7 percent to $1.65 billion.

Analysts on average had expected a profit of 48 cents per share and revenue of $1.67 billion, according to Thomson Reuters I/B/E/S.

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