• by Wayne Friedman , August 7, 2018

Although it is still in positive territory, big cable TV network group Discovery Inc. witnessed a slowdown in U.S. advertising and affiliate fees in the second quarter -- and investors showed their displeasure.

Domestic advertising grew 1% for just Discovery networks. It was up 4% in the previous period. Factoring in the $14.6 billion Scripps Networks Interactive deal, which closed in early March, it was 131% higher to $1.1 billion.

Domestic affiliate fees were also up 1% for Discovery -- registering a 2% gain in the first quarter. With Scripps, there was a 64% rise to $650 million. Discovery domestic TV networks lost 5% in subscribers in the period.

Todd Juenger, senior media analyst at Bernstein Research, said: “If there is a silver lining, we can’t find it.”

Early Tuesday morning trading of Discovery’s stock was down sharply: 7% to $25.06.

International business was a bit better overall -- although it also slowed. Advertising was up 2% for Discovery -- gaining 42% with Scripps to $473 million. (It was 11% higher for Discovery in the second quarter.)

Affiliate fees were 6% higher -- up 16% with Scripps to $532 million and at a 10% increase for the first quarter.

Overall, Discovery Inc revenue growth inched up 1% and was 63% higher when including Scripps to $2.85 billion. Overall net income was down 36% to $244 million.