Discovery Communications Quarterly Profit Rises 32%
The cable network firm reported a U.S. advertising revenue gain of 13 percent, but its results fell a bit short of Wall Street expectations.
NEW YORK - Discovery Communications on Friday reported a fourth-quarter profit improvement amid a 7 percent revenue gain, but its financials fell somewhat short of Wall Street predictions.
Quarterly profit from continuing operations at the cable network company rose 32 percent to $205 million. When including discontinuing operations, profit rose 34 percent. Revenue rose to $1.02 billion driven by growth in the U.S. where advertising revenue increased 13 percent and affiliate fee revenue grew 7 percent.
However, the firm also mentioned higher so-called "other expense," mainly from losses related to investments in joint ventures, which have spent on channel relaunches as of late. Such Discovery ventures include OWN: The Oprah Winfrey Network, which launched in January, and The Hub, which launched in October.
For the full year 2010, Discovery Communications posted 9 percent revenue growth to $3.77 billion. Profit rose from $547 million to $641 million.
For 2011, Discovery predicted a profit of $925 million-$1 billion on revenue of $4 billion-$4.1 billion.
Said Zaslav: "As we move forward in 2011, we will continue to focus on creating high quality programming and expanding our market share globally."
Discussing the Discovery Channel, the CEO said primetime viewership rebounded in January after some fall ratings challenges, adding "we're excited" about the network's outlook.
TLC is "clearly firing on all cylinders," he said, predicting increased 2011 ad revenue and the rollout into more international homes.
ID will also see higher ad revenue this year, and the company wants it to become a top 20 cable network, management also said.
Discovery's ad trends remain solid, with Zaslav speaking of a "robust market." Scatter ad pricing is well above upfront levels and ahead of fourth-quarter levels, executives said.