On Nov. 13, Discovery Holding (NASDAQ:DISCA) released third-quarter earnings for the period ended Sept. 30.

  • Net income decreased to negative $76.6 million, following impairment of goodwill and restructuring charges related to Ascent Media.

  • Free cash flow slightly increased to negative $2.1 million, mainly because of a 31.3% decrease in capital expenditures, to $51.2 million.

  • Discovery Holding has a five-star rating in the Motley Fool CAPS database. Join the service for free today and add your opinion to those of 12,902 other players.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$169.9

$167.9

1.2%

Net Profit

($76.6)

$1.2

N/A

EPS

($0.27)

$0.00

N/A

Diluted Shares

279.9

280.2

(0.1%)

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

34.4%

34.9%

(0.5)

Operating Margin

(57.3%)

(0.8%)

(56.5)

Net Margin

(45.1%)

0.7%

(45.8)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$151.8

$227.5

(33.3%)

Accounts Rec.

$159.7

$148.5

7.5%



Q3 2006

Q3 2005

Change

Accounts Payable

$39.7

$37.2

6.7%



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$49.1

$61.8

(20.5%)

Capital Expenditures

$51.2

$74.5

(31.3%)

Free Cash Flow

($2.1)

($12.7)

N/A



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Related Foolishness:

Discovery Holding is a Motley Fool Inside Value recommendation. To find out why, take a free 30-day trial today.

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