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Discovery profit misses on Scripps acquisition costs

Key Points
  • The company earned 66 cents per share, missing the average analysts' estimate of 86 cents per share.
  • Discovery completed the $11.9 billion acquisition of Scripps in March.
  • The company's shares fell 3.4 percent to $26 in premarket trading.
David Zaslav, president and chief executive officer of Discovery Communications Inc.
David Paul Morris | Bloomberg | Getty Images

Discovery missed analyst estimates for quarterly profit on Tuesday, as the owner of Discovery Channel and Animal Planet took on more costs related to integration of the recently acquired Scripps network.

The company's shares fell 3.4 percent to $26 in premarket trading.

Discovery completed the $11.9 billion acquisition of Scripps in March integrating Scripps' largely female-focused lifestyle channels such as HGTV, Travel Channel and Food Network with Discovery's channels, whose viewers are primarily male.

Net income available to Discovery fell to $216 million, or 30 cents per share, in the second quarter ended June 30, from $374 million, or 64 cents per share, a year earlier.

Advertising revenue from the company's U.S. networks more than doubled to $1.1 billion, while ad revenue from its international networks also rose about 42 percent to $473 million.

However, profit fell as Discovery's costs nearly doubled and restructuring charges related to Scripps piled up.

Excluding items, the company earned 66 cents per share, missing the average analysts' estimate of 86 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 63 percent to $2.85 billion, in line with estimates.

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Media

Disney bull says buy 'the king of content' before its Fox acquisition 

Key Points
  • With Disney poised to acquire Fox assets in a $71.3 billion deal, now is the time to buy, said Ivan Feinseth, chief investment officer of Tigress Financial Partners.
  • As the media giant heads into third-quarter earnings on Tuesday, it is facing pressure due to its proposed Twenty-First Century Fox transition and the future of streaming, among other things.
  • Feinseth shrugged off those concerns, arguing subscription streaming fees as low as $8 or $9 could be a "significant revenue driver" that could compensate for sliding traditional revenue streams, especially for a company with content as strong as Disney's.