Discovery Communications, Inc. (DISCA) Tuesday reported a decline in profit for the third quarter, despite a rise in revenues, reflecting higher expenses mainly related to selling and corporate administration. The company revised its fiscal 2009 revenue and earnings outlook as well.
Net income attributable to shareholders for the quarter declined to $95 million or $0.22 per share from $134 million or $0.44 per share last year. Income from continuing operations for the third quarter declined to $101 million from $134 million in the previous year.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share. Analysts' estimates typically exclude special items.
Adjusted operating income before depreciation and amortization increased 17% to $364 million, driven by 18% growth at U.S. networks and 7% growth at international networks.
Total revenues for the quarter increased to $854 million from $845 million a year ago. Analysts expected revenues of $849.33 million for the quarter.
Revenues from distribution rose to $426 million from $419 million and revenues from advertising rose to $341 million from $332 million in the previous year. Other revenues declined to $87 million from $94 million last year.
By segment, revenues from the U.S. networks increased 5% to $522 million, primarily driven by distribution and advertising revenue growth. Revenues from international networks declined 2% to $293 million due to a $22 million unfavorable impact from foreign currency fluctuations.
Commerce, education and other revenues declined 16% to $38 million, primarily from lower commerce revenues as a result of the transition to a new licensing model and a decline in sound services.
Total expenses increased to $639 million from $549 million a year ago. Selling, general and administrative expenses increased to $338 million from $224 million in the previous year. Interest expense increased to $66 million from $61 million last year.
For the nine-month period, net income increased to $397 million or $0.94 per share from $211 million or $0.74 per share in the same period of the previous year. Total revenues for the period increased to $2.55 billion from $2.54 billion last year.
Looking forward, the company expects total revenue between $3.45 billion and $3.50 billion and net income available to stockholders of $525 million to $550 million for 2009. Previously the company expected to report revenue in the range of $3.375 billion to $3.500 billion with net income available to stockholders of $500 million to $600 million.
Analysts expect earnings of $1.35 per share on revenues of $3.48 billion for the full year.
DISCA closed Tuesday's regular trading at $28.01, up 0.73 or 2.68%, on a volume of 2.90 million shares on the Nasdaq. In after hours, the stock went down 0.24 or 0.86%, trading at $27.3766.
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