Discovery Holding Improves in Q2 Earnings

International operations boost owner of two-thirds of Discovery Communications.

Publicly traded Discovery Holding Monday posted improved cash flow and revenue for the second quarter, benefiting from sharply higher results from international operations, which include nonrecurring gains from currency swings.

Discovery Holding owns two-thirds of closely held cable-network outfit Discovery Communications.

Looking at 100% of Discovery Communications’ financial results, consolidated revenue rose 13% to $863 million for the three months ended June 30 when excluding the sold-off Travel Channel from years-ago results. Consolidated adjusted OIBDA (operating income before depreciation and amortization) cash flow, excluding Travel, increased 22% to $315 million, led by a 19% hike in U.S. networks and 55% in international.

“Both U.S. and international [profit] margins expanded materially, while corporate expenses were higher than we anticipated, due to start-up costs related to [OWN: The] Oprah Winfrey Network and transaction costs related to the upcoming shareholder restructuring,” Merrill Lynch stated in a note to investors.

In the restructuring, media conglomerate Advance/Newhouse Communications agreed June 4 to roll its one-third stake in the cable-network-operating company into publicly traded Discovery Holding, although this has not yet happened.