Discovery Q2 Revs Up Nearly 13%, Global Revs Soar

Discovery Communications, which posted big double-digit advertising gains for its second-quarter earnings period, had a modest upfront advertising season.

Concerning the current advertising market, David Zaslav, president/chief executive officer of Discovery, told analysts in an earnings call: “For us, the upfront looks like mid-single-digit [percentage cost per thousand price gains]. We decided to sell less into the upfront market. The volume was not as strong as it was last year. Having said that, the pricing in scatter for the past two to three years has been strong and the pricing in scatter is strong today.”

He adds: “The advertising market in general, it has been good on pricing and a little bit, year-over-year, down on volume. And for us, at least, we've decided to hold our CPMs and not go for that volume.”

Discovery had stellar results for its second-quarter 2014 period with international advertising revenue climbing 23% to $397 million and U.S. advertising revenues 5% higher to $446 million. Overall advertising added on 12.7% to $844 million.

U.S. networks were hurt somewhat as a result of lower distribution revenues -- down 8% to $319 million. Overall revenue was down 2% to $777 million. Operating income was down 1%.

International networks' revenues, on the other hand, gained 23% to $802 million, with distribution revenues for those networks 19% higher to $373 million. Operating income climbed 19%.

Overall, Discovery exceeded industry estimates in its revenue -- at $1.61 billion, a 9.8% gain over the second quarter of 2013. Estimates were that Discovery would get to $1.59 billion. Net incomes had strong gains -- 26% -- to $379 million during the period.

In the midst of some major potential media mergers -- Comcast-Time Warner Cable and AT&T-DirecTV -- Zaslav says the company is open to big global acquisitions.

In a big down stock market day with overall markets down around 2%, Discovery was one of the few companies -- media or otherwise -- to post gains. Midday trading climbed nearly 2% to $85.25.

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