Discovery's profit misses estimates on higher U.S. costs
(Reuters) - Discovery Communications Inc's (DISCA.O) second-quarter profit missed analyst estimates on Tuesday as it recorded higher operating expenses at its U.S. cable unit.
The media company, which owns cable networks such as Animal Planet and TLC, said net income rose to $300 million, or 82 cents per share, compared with $293 million or 77 cents per share a year earlier.
On an adjusted basis, its EPS of 83 cents per share missed analyst estimates by 7 cents. its shares were down about 1 percent in premarket trading.
Gabelli & Co analyst Brett Harriss said he was expecting better profitability at Discovery's U.S. networks, where advertising was up 10 percent, but it also recorded higher-than-expected operating expenses.
"U.S. advertising was great but programming and marketing costs were up, which hurts profitability," Harriss said.
Discovery acknowledged in a quarterly results statement that its operating expenses rose 17 percent at its U.S. unit, which it said offset revenue growth at that division.
Discovery's revenue rose 30 percent to $1.47 billion. Analysts had expected $1.48 billion, according to Thomson Reuters I/B/E/S. Net income rose to $300 million, or 82 cents per share, compared with $293 million or 77 cents per share a year earlier.
(Reporting by Liana B. Baker; Editing by Gerald E. McCormick and Maureen Bavdek)
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