International drives Discovery profits

Net income jumps 15% to $293 mil

Discovery Communications posted higher profit and sales last quarter with international a motor of growth as it invests in global content and rolls channels into new markets.

Net income jumped 15% to $293 million, in part on lower taxes, Discovery said Tuesday. Revenue rose 7% to $1.1 billion led by 6% growth at U.S. networks and 10% growth internationally, despite a slowing of Western European advertising trends.

Local ad growth, excluding exchange rate shifts, surged 22% internationally. Discovery’s overseas foothold is something that “sets us apart,” said CEO David Zaslav on a conference call with investors, citing Brazil, Mexico, Russia, India and Turkey as particular growth markets. Pay TV is growing around the world and Discovery’s getting better at selling ads for its emerging networks.

Domestically, growth at ID, Animal Planet, Science and the company’s newest channel Destination America, which launched in May, offset some choppiness at flagship Discovery and TLC, Zaslav said.

Ratings at OWN, the joint venture with Oprah Winfrey that got off to a rocky start, exceeded recent expectations and the network is on track to turn profitable in the back half of 2013. “Oprah’s engaged,” he said, and every advertiser that signed up before OWN went on the air has re-signed.

Zaslav said Discovery garnered mid-to-high single digit price increases at its recently concluded upfront sales, and the highest dollar volume in the company’s history. “We had strong receptivity to all of our networks,” which was a key goal of this upfront, he said.

The current third quarter presents some challenges, execs said, given the juggernaut of the Olympics.