Discovery Communications has posted healthy first quarter results, boosted by a rebounding ad market, but has admitted that ratings for joint venture channel OWN: Oprah Winfrey Network have failed to meet expectations.
The U.S. cable giant’s revenues beat analyst expectations to increase US$82 million, or 9%, year-on-year to US$951 million; with pre-tax income increasing 17% to US$427 million. Net income rose 20% to US$305 million, and the firm posted a 15% increase in ad revenues, compared with Q1 2010.
Discovery’s president and CEO David Zaslav attributed the numbers to the company’s “consistent investment in content over the past four years, along with a drive to expand our subscriber base domestically and internationally.
“Moving forward, with advertising revenues expanding and predictable distribution revenues continuing to grow, we remain focused on delivering sustained operating leverage and free cash flow growth,” he added in a statement, “while also continuing to invest in Discovery’s diverse set of brands and platforms around the world.”
During a conference call with analysts, Zaslav admitted that it had been “a slower start” for OWN, with initial ratings coming in “below our expectations” and further investment necessary.
Financially, however, Discovery made a gain of US$102 million from contributing Discovery Health to the OWN joint venture.