• by Wayne Friedman , February 14, 2017

Discovery Communications eked out a small gain in U.S. domestic advertising for the fourth quarter -- better than expected. Still, investors weren’t immediately pleased with overall company financial results.

U.S. ad revenues grew to $421 million -- with some analysts expecting a 3% decline. Discovery says there was higher ad pricing and inventory sold, against lower viewer delivery.

U.S. affiliate revenue did better -- 6% higher to $375 million. Todd Juenger, senior media analyst of Bernstein Research says: “The most troubling KPI [key performance indicator] is domestic affiliate fees which sequentially decelerated for the second quarter in a row (from +8% to +7% to +6%), partly because the July 2015 Comcast renewal has now been fully lapped.”

Mid-day Tuesday trading of Discovery’s stock was down 3% to $28.12.

Good news for Discovery’s international networks: while advertising revenue was down 2% to $379 million, it was up 3% in constant currency. International affiliate revenues did better -- up 3% to $418 million and 10% higher when taking out currency fluctuations.

Juenger says company-wide Nielsen viewer ratings were down 2% in the fourth quarter, and off 3% when looking at 18-49 viewers. Discovery channel ratings were down 15% in total viewers; but 13% higher in Investigation Discovery. OWN, in which Discovery has a 50% stake, also grew 13% in the period.

Total company-wide revenue was up 2% to $1.7 billion.

Net income to Discovery Communications was up 39% to $304 million, due to a big after-tax gain on a major transaction.