Discovery Ad Revs Soar 40%, Global Biz Boosts Growth

Discovery Communications witnessed big advertising revenue growth in its fourth-quarter period, recognized primarily from newly acquired international businesses.

Advertising revenue grew 40% to $817 million, with overall company revenue -- including distribution and other revenue -- up nearly 30% to $1.5 billion. Net income grew 30% to $290 million from $224 million.

U.S. network revenue grew 5% to $740 million, coming from 4% advertising growth to $411 million and 7% distribution growth to $309 million.

International business gained from acquiring Nordic SBS and consolidating Discovery Japan operations. Core advertising was up 26% with affiliate fee revenues adding on 16%. Still, MoffettNathanson Research says cash flow -- earnings before interest, taxes, depreciation and amortization -- was well below estimates.

Looking to build out its international networks, last month, Discovery agreed to buy a controlling interest in Eurosport International from TF1 Group for approximately $340 million.  
                
MoffettNathanson Research says the combined joint ventures of networks OWN and The Hub still lost $11 million during the period.

During midday trading, Discovery’s stock was down 2.7% to $80.69. Analysts say Discovery’s earnings came in a bit under estimates.

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