Discovery Q2 2020 Profit Fell By More Than Three Times
American media company Discovery, which owns the TV channel of the same name, as well as TLC, Animal Planet and others, in the second quarter of 2020, reduced net profit by more than three times amid a fall in advertising revenue, to $271 million, or $0.4 per share.
In April-June 2019, the company's net profit was $947 million, or $1.33.
Adjusted earnings (excluding amortization of acquisition-related intangible assets) were $0.77 per share, compared to $0.98 per share a year earlier.
Quarterly revenue fell 12% to $2.541 billion. At the same time, in the US, the figure fell by 6% to $1.756 billion, in the world-by 23% to $783 million.
Advertising revenue in the United States fell 14% to $997 million, while distribution revenue rose 7% to $739 million. Discovery's international division reduced advertising revenue by 37% to $276 million, while its distribution revenue fell 2% to $486 million.
Discovery noted that demand for advertising products and services declined in the context of the pandemic, especially in the second quarter.
"Our advertising revenue, which accounted for 54% of revenue in 2019, declined in the first half of 2020 and may continue to decline significantly until the end of 2020 if our advertising partners in certain sectors (such as tourism) reduce or are unable to resume advertising spending," the company said in a statement.
Besides, the company's results are affected by the postponement of certain sporting events, including the Olympic Games in Tokyo.
Discovery shares are down 3.2% on Wednesday. Since the beginning of the year, the company's capitalization has fallen by 35.2% to $10.46 billion.