International Networks Boost Discovery Earnings

Revenue, OIBDA and income all up from third quarter 2007.

Discovery Communications announced its third quarter earnings Friday, its first since becoming a fully public company. The earnings assume the transaction between Discovery and Advance/Newhouse occurred on January 1, 2007, and thus includes 100% of Discovery’s results for 2007 and 2008. Despite the tough economy, Discovery saw increased revenues, income and OIBDA, driven largely by growth in its international networks division.

Revenues increased 11% to $845 million, with 16% growth in the international networks division and 6% growth domestically. Adjusted Operating Income Before Depreciation and Authorization (OIBDA) was up 23% from last year driven by a 58% growth internationally and 6% domestically.

Income reached $94 million ($0.31 per share) in the quarter, up from $30 million ($0.11 per share) a year ago, although this is due to the higher Adjusted OIBDA and a $65 million benefit this year “related to the unrealized change in the fair value of the marked to market equity-based compensation which was an expense of $44 million in the third quarter a year ago,” according to the company.

Free cash flow was $200 million for the third quarter, and $339 million for the first none months of 2008, an increase of $271 million from the as adjusted results from the first nine months of 2007.

“Our ability to generate 11% revenue and 23% Adjusted OIBDA as adjusted growth in these challenging economic and capital market conditions demonstrates the strength of our brands, the diversity of our revenue streams and the global demand for our content,” said David Zaslav, CEO of Discovery Communications in a statement. “As we move forward as a public company we remain steadfastly focused on delivering leading nonfiction programming that can be leveraged time and again across our domestic and international platforms.  With our unique content and our unparalleled global reach, our objective is to continue to grow and enhance value for our stakeholders despite the uncertain economic environment.”