Discovery: Revs Flat, But Digital Growth
Discovery Communications U.S. advertising rose in its third quarter -- while licensing fees declined due to an extended reporting period for the third quarter of 2011.
Discovery witnessed a 7% gain in advertising for its U.S. networks at $343 million, with network license fees dropping 14% to $300 million. Still, Discovery says during the period that it got "higher rates and subscriber growth primarily from networks carried on the digital tier."
All that lowered U.S. revenues by 4% to $664 million. International business help offset some of this -- growing 7% or $390 million, with advertising revenues growing 3% to $124 million.
Overall, Discovery Communications revenues were essentially flat -- at $1.076 billion from $1.080 billion in the third quarter of 2011. Discovery says operating income grew 2% to $386 million. Net income dropped to $206 million from $237 million.
Some analysts also noted that Discovery made a major Netflix deal in the third quarter of 2011, and excluding that, this year's quarter profitability would have looked better. However, investors weren't all that happy with the results. Mid-day trading witnessed the company's stock down 3.9% to $57.15.
"In the U.S. we expanded market share, built new hits and capitalized on the ongoing strength of the ad market, while internationally, we further leveraged the universal appeal of our programming and increased penetration of global pay-TV platforms ...," stated David Zaslav, president and CEO of Discovery.