Discovery Communications Sees Modest 1Q Ad Gains

Discovery Communications earned single-digit percentage gains in revenue and profitability for its first-quarter reporting period -- amid more modest hikes in U.S. network advertising revenue.

Discovery's revenues increased 2% to $1.6 billion, with net income with up 5% to $263 million. U.S. networks’ revenues were 8% higher to $807 million. 

Discovery's U.S. networks had 8% distribution growth to $390 million and 7% advertising growth to $402 million.

Advertising revenues grew as a result of higher pricing and inventory management, partially offset by lower ratings. Advertising results were in line with analysts expectations.

While international networks had a 4% gain in revenue to $411 million, advertising dipped 9% to $285 million. Much of these lower results came from weak SBS Radio business and unfavorable foreign exchange currency rates. Excluding this, international advertising grew 4%.

Bernstein Research notes that overall prime-time Nielsen C3 ratings -- the average commercial ratings plus three days of time-shifted viewing -- was down 7% in 18-49 ratings for all its networks and 4% lower in overall viewer ratings.

Discovery Communications stock was 5.3% higher to $28.00 in mid-Thursday trading.



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