Discovery Communications Q1 Profit Rises 80%

 F. Scott Schafer

NEW YORK -- Discovery Communications on Thursday posted improved first-quarter earnings as advertising and affiliate fee growth continued.

 The cable networks firm reported a quarterly profit from continuing operations of $305 million, up 80 percent compared with $169 million in the year-ago period. The latest quarter's results included a gain of $102 million, net of tax, as the company contributed the U.S. Discovery Health network to the OWN: Oprah Winfrey Network joint venture,

 Revenue rose 9 percent to $951 million as U.S. advertising revenue climbed 15 percent when taking into account the exclusion of Discovery Health.

On a conference call with analysts, CEO David Zaslav boasted that the company's Investigation Discovery, branded as ID, is the fastest growing cable channel in the U.S.

"We expect ID to deliver significant ad growth in 2011," he said.

Zaslav was less assertive, though, that the joint-venture Oprah Winfrey Network would experience such a burst of success just yet.

"As with any new cable channel, some content is working while other programming is not connecting with the audience," he said about OWN.

He said the network is still "establishing its voice" and that ratings have been disappointing, but that he is looking forward to Winfrey dedicating more time to the channel.

The strength of OWN "is Oprah herself," he said. "Her show will be winding down and we will be getting Oprah and her team."

Discovery reported its earnings prior to Wall Street trading Thursday. The stock rose 2 percent to $43.14.

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