• by Wayne Friedman , November 14, 2006

Discovery Holding Co., the 50% owner of media and entertainment company Discovery Communications Inc., suffered a steep net loss in the third quarter, hurt by a goodwill charge.

The company's net loss was $76.6 million. This compared to a profit of $1.2 million during the same period last year. Revenue edged up about 1% to $169.9 million, from $167.9 million last year. The goodwill charge was $93.4 million, related to its media-management services group.

For Discovery Communications itself, revenue for the company's U.S. networks increased 10% to $469 million, and operating cash flow was up 14% to $188 million. Revenue growth was largely due to an 18% increase in distribution revenue. Ad revenue couldn't keep pace, however--dropping 1% versus the same time period of a year ago.

Discovery has seen a resurgence in ratings in recent periods at three of its largest networks: Discovery Channel, TLC and the Travel Channel. Despite these gains, the company says ad revenue decreased by 1%, mostly as a result of low sales and a soft advertising market.

Advertising performance internationally scored much better. Discovery's international networks saw its revenue hike up 23% to $223 million. Distribution revenue increased 26%, and ad revenue climbed 18%.

All this was the result of higher viewership in Europe and Latin America, combined with an increase in subscribers in most markets worldwide.