Foreign Revenue, Cost Efficiencies Lift Discovery

Discovery Communications Holding’s Operating Cash Flow Soars 59% in First Quarter
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Discovery Communications Holding reported Thursday that its adjusted operating cash flow soared 59% in the first quarter, which surpassed stock-analyst expectations, due to improvements in foreign operations and keeping a lid on costs.

Merrill Lynch called the earnings “blockbuster” and said a related publicly traded company is “in the early stages of a multiple-year, rapid-growth/margin expansion.”

Adjusted operating cash flow rose to $286 million in the quarter ended March 31 from $180 million, reflecting the 59% increase. Results excluded Travel Channel and Discovery Channel Stores, which are discontinued. On an unadjusted basis, operating cash flow increased 51%.

Consolidated revenue climbed 12% to $795 million. Revenue in the international-networks segment soared 23% to $267 million, although the percentage gain would have been a still-healthy 15% excluding the impact of currency exchange from the weak dollar, while U.S. networks achieved just a 3% revenue hike to $491 million.

The company’s cable-TV-channel group includes Discovery Channel, Animal Planet, TLC and Discovery Health Channel.

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