Discovery Communications reported lower-than-expected second-quarter earnings and cut its full-year outlook, but it also said Oprah Winfrey’s OWN Network, which it partly owns, was finally turning a profit.
Discovery, which owns cable networks such as Animal Planet and TLC, said it now expected 2013 revenue of $5.55 billion to $5.63 billion, down from the forecast of $5.58 billion to $5.70 billion that it gave last quarter. The company blamed unfavourable currency fluctuations and costs from its $1.7 billion acquisition of Scandinavian company SBS in December.
Chief Executive Officer David Zaslav had some good news about OWN, on which Discovery has spent more than $500 million. He said the cable network, a joint venture with Winfrey, had turned a profit faster than expected as it benefited from ratings traction with two new series from Tyler Perry, “The Have and Have Nots” and “Love Thy Neighbor.”
“OWN is now cash flow positive and starting to pay down the investment Discovery has made in the venture,” Zaslav said.
The company originally said OWN would turn a profit in the second half of the year.
Last year, OWN went through a restructuring that included layoffs, executive departures and a reshuffling of its programming line-up. But Zaslav said it had signed on 30 new ad partners and that the channel had the “highest growth of any cable network in the second quarter.”