Discovery Q1 profit hit by losses at OWN

MUMBAI: Discovery Communications? net income for the first quarter ended 31 March has taken a hit due to losses at Oprah Winfrey Networks, in which it holds 50 per cent stake.

First quarter revenues of $1.1 billion registered a 16 per cent growth over the first quarter a year ago, led by 16 per cent growth at U.S. Networks and 18 per cent growth at international networks.

Adjusted operating income before depreciation and amortization (Oibda) grew 19 per cent to $507 million, driven by an 18 per cent increase at U.S. Networks and a 19 per cent increase at international networks.

First quarter net income from continuing operations got trimmed by $84 million to $221 million compared to the year-before quarter as strong operating performance in the current year was offset by a gain of $102 million, net of tax, in the first quarter of 2011 from the contribution of the Discovery Health network to the OWN: Oprah Winfrey Network joint venture.

Current quarter results also reflect that during the quarter the company began recording 100 per cent of OWN?s net losses in Other expense, net, as accumulated operating losses at OWN exceeded the equity contributed to OWN.

Free cash flow was $227 million for the first quarter, an increase of $21 million from the first quarter of 2011, due to increased operating performance and lower long-term incentive compensation payments, partially offset by higher cash tax payments. Free cash flow is defined as cash provided by operating activities less acquisitions of property and equipment.

The company also repurchased 6.9 million shares for an aggregate purchase price of $288 million.