Silver Spring-based Discovery Communications, Inc. (NASDAQ: DISCA, DISCB, DISCK), reported stellar financial results for its second quarter ended June 30, 2011.
The number one non-fiction media company in the world surpassed analyst estimates of $0.61 cents per diluted share and revenues of $1.05 Billion, bringing in net income of $254 Million or $0.62 cents per diluted share, nearly a quarter of revenues.
Net income was up $148 Million, a considerable sum and more than twice the amount in the same quarter of 2010 when profits totaled $106 Million or $0.25 per diluted share.
Revenues crossed $1 Billion in the quarter for the first time since the company started reporting as a public company in 2007. The $1.07 Billion in revenues for the second quarter of 2011 was 11% higher than the $963 Million in revenue accumulated in 2010.
International networks led the revenues gain, rising 20% to $368 Million. U.S. Networks also increased and continued to be the biggest share of revenues; up 6% to $660 Million. The Discovery Education division in Bethesda incurred just under $40 Million in revenue, an increase of 18% due to higher video streaming.
The primary reason for revenue growth was advertising and distribution fees. Advertising pricing and sellouts were higher and distribution grew 4% due to rate increases and growth from international subscribers.
The international market is becoming increasingly important to Discovery, with India, Brazil and Russia showing the most promise. The Discovery Kids network for example (now the Hub network in the U.S. via 50/50 partnership with Hasbro) is the #1 cable network in Brazil.
During the company's conference call, the company said it is pushing The Learning Channel (TLC) as a dominant global brand. TLC is already the most widely distributed female network in the world in 80 million homes and 34 countries.
Discovery possess 13 networks, including the Oprah Winfrey Network (OWN), Science Channel, Animal Planet, and flagship Discovery Channel. The top performing network in the second quarter was Investigation Discovery (ID.), it was the fastest growing network, biggest gainer in ad sales growth and had a long retention rate amongst viewers. June also saw the highest viewership for the Hub network.
The Oprah Winfrey Network, another 50/50 partnership with Discovery, brought big management changes with the day time talk show queen herself becoming CEO and Chief Creative Officer. The new management includes Sheri Salata Executive Producer at HARPO studios and Erik Logan whom will both become president at OWN.
"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. Our growth this past quarter was achieved despite continued strategic investments to further our competitive advantage both domestically and internationally. 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." said David Zaslav President and Chief Executive Officer of Discovery Communications.
The media giant said OIBDA (Operating Income Before Depreciation And Amortization) increased 12% to $510 Million. The non-GAAP measure is being increasingly used by companies over EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
Discovery Communications' estimated full year 2011 outlook of revenues between $4.075 Billion and $4.17 Billion.