(Reuters) - Discovery Communications Inc said it was unlikely to buy back any more shares this year as it looks to save cash and retain its credit rating, sending its shares down about 9 percent.
The Discovery Channel and Animal Planet owner also reported quarterly revenue and profit below analysts’ expectations, hurt by lower ad sales and a strong dollar.
“... Given our current debt-to-EBITDA threshold is at the higher end of target levels for ‘BBB’ companies, we are now focused on preserving cash for the remainder of this year,” CFO Andrew Warren said on a conference call with analysts.
The company has bought back $575 million of shares this year, including $52 million of stock it has agreed to buy from Advanced New House, Warren added.
“... We forecast having meaningfully more capital available (in 2016) and expect the amount of capital allocated to share repurchases increase significantly next year,” Warren said.
Warren said the company has spent over $6.2 billion buying back shares since the beginning of the share repurchase program at the end of 2010.
The company also forecast full-year revenue, excluding currency, to grow in the high single to low double digits and adjusted profit to rise in low double digit in percentage terms.
Revenue from ad sales, which accounts for almost half of total revenue, fell 3.6 percent in the quarter ended June 30.
Up to Tuesday’s close, the dollar had risen more than 20 percent against a basket of major currencies in the past 12 months.
Last month, Discovery said it would take full ownership of sports broadcaster Eurosport for 491 million euros from French media group TF1 Group and also renewed a distribution agreement with Comcast Corp.
Discovery said revenue from international networks rose 1 percent, while revenue at its U.S. networks rose 4.9 percent.
International networks accounted for nearly half of revenue in the quarter.
However, net income available to the company fell to $286 million, or 44 cents per share, in the second quarter ended June 30, from $379 million, or 54 cents per share, a year earlier.
Revenue rose 2.7 percent to $1.65 billion.
Analysts on average had expected a profit of 48 cents per share and revenue of $1.67 billion, according to Thomson Reuters I/B/E/S.
Discovery’s shares were down more than 8 percent at $30.00 in late-morning trading on the Nasdaq.
Reporting by Abhirup Roy, Sai Sachin R and Lehar Maan in Bengaluru; Editing by Ted Kerr and Don Sebastian