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 angela.chen@dowjones.com
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