Discovery Communications released its financial results for the third quarter of 2009, reporting a drop in net income of US$39 million, from last year’s $134 million for Q3 to $95 million. Discovery says the decrease largely reflects a $53 million growth in Adjusted OIBDA and lower tax expense of $39 million in the quarter, both of which were offset by a $91 million expense in the current year from the unrealized change in the fair value of the mark-to-market share-based compensation. Revenues of $854 million were reported, an increase of five percent over last year. Adjusted Operating Income Before Depreciation and Amortization (‘OIBDA’) increased 17% to $364 million, driven by 18% growth at U.S. Networks and seven percent growth at International Networks.
Ad revenue for U.S. networks increased five percent, from $249 million to $261 million, while the ad dollars were down four percent for international networks. Revenues for international networks also reported a decrease of two percent, the result of a $22 million unfavorable impact from foreign currency fluctuations.
In an analysts’ call, Discovery Communications CEO David Zaslav, joined by Discovery CFO Brad Singer on the call, said that the success of TLC in the US could possibly lead to the building of an international women’s network in 2010. ‘The TLC brand, we think, is very broad… the road map is to continue to build on that audience,’ Zaslav said, regarding the channel’s success in the U.S.
As for Discovery Communications’ investment in its brands, Zaslav said, ‘We’re investing in Science, we’re investing in ID, we’re investing in Animal Planet…but we’re also being a little bit prudent,’ with the current strategy being to invest in the brands they feel have the most potential. Little to no news was given about the upcoming launch of the Oprah Winfrey Network, but Discovery said an update would be provided soon.