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Source: Discovery Communications.

Discovery Communications (NASDAQ:DISCK) today posted strong second-quarter earnings result: The TV network giant met analysts' sales growth expectations and beat profit forecasts by $0.01 per share.

Here's a big-picture look at how the results compare to Wall Street's targets:

MetricExpected*Actual
Revenue $1.7 billion $1.7 billion
Profit $0.48 per share $0.49 per share

*Expected is the average forecast of the 22 analysts who cover the stock. Source: Yahoo! Finance and Discovery's financial filing.

Second-quarter results
Discovery's underlying sales growth was better than the headline numbers suggest. While flat on a reported basis, revenue improved by 11% after accounting for the negative impact of foreign currency swings against the U.S. dollar. That strong bounce was powered by a 12% jump in the distribution fees that Discovery charges TV providers for its content. Distribution charges are now up a hefty 13% through the first six months of the year. "Driven by our unmatched portfolio and steady growth around the world, Discovery's strong start to the year continued in the second quarter," said CEO David Zaslav. 

Disc Animal

Source: Discovery Communications.

But advertising makes up a slightly larger portion of the business than distribution fees do, and that revenue stream remained weak this quarter. Ad revenue was flat after rising by 1% in the prior quarter. Management explained that higher ad prices offset lower sales of space to advertisers. Discovery's advertising business is flat through the first six months, although that's significantly better than the broader industry is doing.

The international segment also logged impressive growth this quarter. Currency-neutral sales rose 7% on balanced growth in both advertising and distribution fees. Latin America was Discovery's standout region this quarter, and benefited from both higher prices and strong subscriber gains.

Rising profitability and reaffirmed outlook
Meanwhile, profit margin continued to march higher, improving by a percentage point in the U.S. and by seven percentage points abroad. Discovery's domestic margin is now 61% while it earns about half of that, or $0.33 to the dollar, internationally.

Management affirmed their full-year sales outlook today, saying they still expect revenue growth in the "low double digits" at the high end of their range. Executives are particularly excited about the long-run impact of three big deals that closed this quarter: (1) securing rights to the Olympic Games in Europe, (2) acquiring full ownership of Eurosport, and (3) reaching a new distribution agreement with cable operator Comcast.

These deals should together "bolster Discovery's position and market share for years to come," Zaslav said. They will likely boost the international business along with global distribution fees, which should help results improve even as the U.S. advertising market remains weak.  

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Discovery Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.