• by Wayne Friedman , November 7, 2008

While bigger media companies have been taking it on the chin in recent days, Discovery Communications offered up strong numbers for its third-quarter results, and investors responded. In midday trading, Discovery stock gained over 10% to $13.32.

Discovery said adjusted operating income climbed 23% to $311 million on 11% revenue gains, to $845 million. On a net income basis, the company rose to $134 million from $7 million in the period before.

Advertising revenue was 5% improved, but could have gone higher if not for lower ratings at TLC and Discovery Channel. Overall U.S. networks' revenue in the third quarter increased 6% to $498 million, primarily driven by distribution and advertising revenue growth. Distribution revenue climbed 8%, largely from higher rates.

Concerning the slowing advertising market, David Zaslav, chief executive officer of Discovery Communications, said: "The scatter market is slowing down. In the first quarter, we have seen some take back [in terms of upfront cancellations]. Internationally, we have already felt the pinch in Europe. But we haven't really felt the [full] punch of it yet."

International networks' revenue for the third quarter increased 16% to $300 million--with 22% distribution revenue growth, primarily from subscriber increases.

Digital revenue for Discovery is expected to be in the $50 million range for the year. Company officials say the business is not profitable right now.