UPDATE 2-Discovery profit jumps, helped by ad market

Thu Apr 28, 2011 11:27am EDT

* Adj earnings of 49 cents vs Wall St view 47 cents

* Revenue up 9 pct, driven by strong ad market

* Sees full year net income of at least $1 bln

* Shares up 2.6 percent (Adds executive comment, details)

By Paul Thomasch

NEW YORK, April 28 (Reuters) - Discovery Communications Inc (DISCA.O), whose cable TV networks feature hits such as "Storm Chasers" and "Deadliest Catch," reported an 80 percent rise in quarterly earnings and issued an upbeat full-year forecast.

Discovery, whose cable networks include Discovery Channel, TLC, and Animal Planet, was helped by the combination of a stronger advertising market and better audience ratings, particularly at Investigation Discovery, the fastest growing U.S. cable channel.

In response to an earnings report that showed better-than-expected profit and revenue, Discovery shares rose 2.6 percent in midday trade. It said earnings this year would be between $1 billion and $1.075 billion, topping the analyst consensus of $948 million.

Discovery's U.S. advertising revenue rose about 15 percent in the quarter, and Chief Executive David Zaslav cited strength across a range of ad categories as well as solid ratings growth.

He said viewership rose 6 percent across its networks, with Investigation Discovery ratings up a 50 percent.

But Zaslav also acknowledged that ratings have failed to live up to expectations at one of its highest-profile ventures, the Oprah Winfrey Network.

A joint venture between Discovery and Oprah Winfrey's production company, OWN launched in the United States early this year as a largely female-oriented network with a combination of lifestyle, advice and uplifting shows.

Winfrey, regarded as the most influential woman on U.S. television, is expected to devote more energy to OWN in the coming months after the last original episode of her popular syndicated TV show, "The Oprah Winfrey Show," airs on May 25.

But to date, ratings have disappointed executives. "As we look at the network, the ratings ... have been below expectations," Zaslav said on a conference call. "So we have been digging in and we are focused on what what does the audience want and we are fully committed to the brand."

Discovery's net income rose to $305 million, or 74 cents a share. In the period a year ago, it earned $169 million, or 39 cents a share. Adjusted earnings of 49 cents a share surpassed estimates of 47 cents, according to Thomson Reuters I/B/E/S.

Revenue increased 9 percent to $951 million, which also topped analyst forecasts of $938 million.

Shares of the company rose $1.10 to $43.49 in Nasdaq trading. (Reporting by Paul Thomasch; Editing by Lisa Von Ahn and Derek Caney)

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