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Discovery posts revenue gain in Q4

Rocky Wire Reports

Published February 15, 2008 at 1:40 p.m.
Updated February 15, 2008 at 1:59 p.m.

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Advertising demand and higher prices at cable networks propelled Discovery Communications to a fourth-quarter revenue gain of 7.7 percent, the company said today.

Sales at Discovery, controlled by John Malone's Discovery Holding Co., jumped from $823 million in 2006 to $886 million in 2007, the Douglas County-based company said today in a statement. Operating cash flow fell 35 percent from $185 million in the fourth quarter of 2006 to $121 million in 2007. The company reported a $139 million charge to write off some TV programs and other assets, which it said caused the decline.

Advertising sales rose 6 percent during the quarter, the company said. U.S. television ad sales rose 11 percent, excluding 2006 results from the Travel Channel, which Discovery sold to Cox Communications Holdings Inc. last year.

Sales were slightly below expectations because the strike by Hollywood writers delayed some projects, Miller Tabak & Co. analyst David Joyce, based in New York, wrote in a note to clients today. He recommends investors buy the shares and doesn't own them.

Discovery Holdings owns two-thirds of Discovery Communications, based in Bethesda, Md. Advance/Newhouse Communications Inc., the closely held parent of the Conde Nast magazine group, owns the other one-third.

Discovery Holdings' announcement didn't include a figure for net income, either for itself or for Discovery Communications. The company typically discloses its net profit or loss in filings with the Securities and Exchange Commission.