Discovery Communications posts strong international growth

By Angela Chen 

Discovery Communications Inc. said strong international growth led to better-than-expected earnings in the fourth quarter, despite lower profits at its domestic segment.

The cable channel owner, whose properties include Discovery Channel, TLC and Animal Planet, has been expanding overseas aggressively in recent years.

Back home, Discovery recently signed a deal with Sony Corp. to be part of an online video-streaming service it plans to launch, becoming the second major media company after Viacom Inc. to do so. But Discovery's international operations have become a bigger revenue driver than its U.S. business.

For the December quarter, the company reported a 9% rise in revenue to $1.68 billion, slightly below analyst estimates of $1.7 billion.

The increase was led by a 17% rise in international networks and a 1% gain in domestic networks. Distribution revenue climbed 24% and advertising revenue rose 7% in the international market, primarily on better delivery in western Europe and higher volume in Latin America.

In terms of profitability, the international networks showed an 11% rise in operating income before depreciation and amortization, while domestic networks fell 7% on that measure.

Overall, distribution revenue saw the biggest increase, growing 16% from the prior-year period, while advertising revenue inched up 1.7%.

In all, Discovery posted earnings of $250 million, or 38 cents a share, down from $289 million, or 41 cents a share, a year earlier. Excluding special items such as restructuring costs, earnings fell to 43 cents a share from 46 cents a share.

Analysts polled by Thomson Reuters were expecting earnings of 41 cents on revenue of $1.7 billion.

Shares of Discovery, which were inactive premarket, have declined about 10% this year through Wednesday's close.

Write to Angela Chen at [e-mail]

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