Discovery Reports Profitable Q1
Discovery Networks reported a gain in earnings for the first quarter, bucking economic trends.
The company said its net income was $119 million, or 28 cents a share, compared with $34 million, or 12 cents a share.
Revenues rose to $425 million from $402 million a year ago.
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At Discovery’s domestic cable networks, which include Discovery Channel and TLC, earnings were up 7% to $275 million as revenues increased 5% to $509 million.
Domestic ad revenues were up 2%. The company said the increase was the result of higher pricing and increased ratings, partially offset by lower cash sellouts due to softness in the economy.
“The growth Discovery delivered in the first quarter despite economic and foreign currency headwinds demonstrates the strength of our business model,” Discovery CEO David Zaslav said in a statement.
He said the company has “confidence we can continue to expand operating margins in today’s challenging environment.”
Discovery has been rebranding some of the channels that have good distribution but do not contribute much to the company’s bottom line.
Last week Discovery announced a deal to sell a 50% interest in Discovery Kids to Hasbro and to create a new channel for children. The company also is working with Oprah Winfrey on a joint venture to create OWN: The Oprah Winfrey Network.
Discovery said it will spend $70 million to $80 million on OWN, which is expected to launch in early 2010.