Discovery turns up a profit

Shares rise on fourth-quarter performance, optimism for the future

For a TV company, Discovery Communications isn't doing so bad. The publicly traded entity formed last year said Wednesday that it earned $106 million in the fourth quarter, up from a loss of $170 million last year. Discovery showed an 8% gain in revenue at its U.S. networks, while its international nets saw a 4% decline.

The company wowed Wall Street with guidance indicating that it does not expect domestic advertising to fall this year compared with last and that international advertising will show a small gain.

Shares of Discovery soared 13% on Wednesday to $14.93, making it the best performer on The Hollywood Reporter Showbiz 50 stock index.

Not baked into the guidance — positively or negatively — is the impact of OWN: The Oprah Winfrey Network, which Discovery will spend up to $80 million on and launch this year.

Discovery's performance — and a rising share price — are in stark contrast to others in the TV business. Station owner Hearst-Argyle, for example, on Wednesday reported a 9% drop in revenue to $197.1 million and a loss of $552.1 million, including a $570 million impairment charge.

Hearst-Argyle also said it will suspend its dividend, and its stock plunged 9% Wednesday to $1.64, hovering just above an all-time low. CBS recently slashed its dividend, and its stock also sits near a historic low.

But at Discovery, CEO David Zaslav boasted of double-digit ratings growth among key demographics at the Discovery Channel and TLC. He also said the overseas subscriber base grew 16%. (partialdiff)
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