Discovery First-Quarter Profit Stays Unchanged, Misses Estimates

David Zaslav

Discovery Communications boss David Zaslav made $49.9 million in 2012, slightly below the $52.4 million that he had earned in 2011. But that was enough to see him yet again rank just behind Moonves in terms of compensation for bosses of big entertainment companies. The year-over-year drop was due to changes in the value of his stock options, even as the company’s shares rose more than 50 percent last year.

UPDATED: The cable networks giant, led by CEO David Zaslav, posted higher U.S. and international revenue, but costs related to recent acquisitions abroad were a drag on the bottom line.

Discovery Communications on Tuesday reported improved first-quarter revenue but virtually unchanged earnings that fell short of Wall Street expectations amid costs tied to recent acquisitions in Europe.

Earnings of $230 million were flat compared with $231 million in the year-ago period. The company said higher revenue and lower stock-based compensation expenses were offset by higher amortization costs for acquisitions, such as SBS Nordic in Scandinavia.

Earnings per share, though, rose from 63 cents to 66 cents as the company continued to buy back stock. Excluding acquisitions-related amortization costs, the company reported earnings of 75 cents per share. Another profitability metric, adjusted operating income before depreciation and amortization, rose 5 percent in the first quarter to $525 million.

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The cable networks giant, led by CEO David Zaslav, posted a 22 percent revenue increase to $1.41 billion on higher U.S. and international revenue.

International revenue jumped 51 percent to $671 million, while U.S. revenue rose 3 percent to $708 billion amid a 5 percent U.S. advertising revenue gain. International networks operating income before depreciation and amortization rose 18 percent, with the U.S. business recording a 2 percent improvement. 

"The larger audiences and consistent market share gains we are delivering are driving sustained financial results, even as we further invest in our platforms and integrate strategic acquisitions that will enhance our long-term growth prospects," Zaslav said. 

Ahead of the earnings report, Nomura analyst Anthony DiClemente wrote in a report: "Discovery has seen a considerable improvement in viewership over the past quarter, which we attribute to the success of Investigation Discovery, the Oprah Winfrey Network and the Discovery Channel, which rebounded nicely following the post-Winter Olympics weakness."

Twitter: @georgszalai