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Intl networks help grow Discovery’s Q2 revenues by 10%

MUMBAI: Infotainment broadcaster Discovery has reported a 10 per cent increase in revenue to $1.6 billion in the fiscal second quarter.

The company said a 23 per cent growth at International Networks was partially offset by a two per cent decline at US Networks, primarily due to additional revenues from licensing agreements in the prior year.

Adjusted OIBDA increased by six per cent to $694 million. Net income increased by 26 per cent to $379 million.

Discovery president, CEO David Zaslav said, “The operating strength across Discovery’s organic businesses, along with increased contributions from strategic acquisitions, led to sustained financial momentum during the second quarter. Our persistent focus on building a broad and deep content portfolio to leverage the opportunities across our unique distribution platform is driving viewership and revenue growth worldwide as pay-tv continues to evolve. Going forward, investing in compelling programing remains a priority as we integrate our recent acquisitions and build new avenues of growth so we can deliver additional long term value to our shareholders.”

Adjusted operating income before depreciation and amortization (OIBDA) increased by six per cent to $694 million, as International Networks were up by 19 per cent while US Networks were down by one per cent due to the impact of licensing agreements. Excluding the impact of the Eurosport transaction, foreign currency fluctuations and licensing agreements, total company revenues increased by nine per cent and adjusted OIBDA increased by 11 per cent.

Second quarter net income available to Discovery Communications Inc. of $379 million ($1.09 per diluted share) increased $79 million, or 26 per cent, compared to $300 million ($0.82 per diluted share) for the second quarter a year ago, primarily due to the strong operating performance in the current quarter.

The current quarter results also reflect a $31 million gain associated with the sale of HowStuffWorks, a $29 million gain associated with the consolidation of Eurosport and a $15 million increase in equity earnings. Adjusted earnings per diluted share (Adjusted EPS), which excludes the impact of the amortisation of acquisition related intangible assets, was $1.16 per diluted share in the second quarter of this year compared with $0.91 per diluted share in the same period a year ago. For the last twelve months, adjusted EPS was $3.62, up 35 per cent compared with $2.69 in the prior twelve months.

Free cash flow was $202 million for the second quarter, a decrease of $109 million, or down 35 per cent from the second quarter of 2013, as increased operating performance was more than offset by higher tax payments, as well as higher content and interest payments. Free cash flow is defined as cash provided by operating activities less purchases of property and equipment.