International growth helped Discovery Communications earnings grow 46 percent, in line with expectations, while revenue grew seven percent.
Discovery has been a Wall Street darling over the past year as its stock DISCA — up well over 100 percent. Discovery's had a busy year moving forward with new channels analysts expect to boost growth.
Discovery's readying to launch a joint venture with Oprah Winfrey, "OWN," later this year. At CES Discovery announced a partnership with Sony and Imax to launch a 3-D network, and it's working with Hasbro on a new kids' TV network to replace Discovery Kids.
Discovery's full year projections are on the lower-end of analyst forecasts: Discovery's looking for revenue of $3.63 billion to $3.75 billion while analysts are expecting $3.72 billion. This is one factor contributing to the stock's drop after the market open. Morgan Stanley analyst Ben Swinburne points out that while Discovery's adjusted OIBDA guidance is less than his projections, he says that the guidance is "likely" conservative. Swinburne is bullish on the US ad market, which he says will push Discovery's results to the high end of forecasts.
Barclays; analyst Anthony DiClemente writes that he's optimistic that management set the bar low for Discovery. The company's US advertising growth was about 2 percent, nearly double what DiClemente projected.
Discovery's success is really an international story, and not just because of interest rate benefits. Discovery's international revenue grew 22 percent, but even excluding exchange rate gains, revenue grew 16 percent on stronger advertising and subscription fees. Zaslav said in the company's earnings call that in emerging markets like India and Brazil "as the market grows, we grow with it."