Wednesday November 4, 04:20 AM

Discovery quarterly profit down 29 percent

NEW YORK (Reuters) - Discovery Communications quarterly profit fell 29 percent, largely because of extra stock compensation expenses that masked stronger advertising and distribution fees at its U.S. cable networks.

The parent of the Discovery Channel, Animal Planet and the Science Channel said third-quarter profit fell to $95 million, or 22 cents a share, from $134 million, or 44 cents a share, a year earlier.

Revenue at Discovery rose 1 percent to $854 million, surpassing the $850 million analysts polled by Thomson Reuters I/B/E/S had expected.

Few media companies have reported any gain in revenue in recent quarters -- however slight -- but Discovery is typically less reliant on some of the hardest hit U.S. ad categories, like automakers or financial institutions.

Another factor is that national cable channels - like Discovery's -- have proven relatively resilient to the downturn when stacked up against local TV or broadcast networks. U.S. ad revenue rose 5 percent.

Discovery's revenue is also underpinned by the fees it collects from cable companies that carry its channels. U.S. distribution revenue rose 5 percent for the quarter.

Its international business showed less strength, with revenue dropping 2 percent.

Shares of Discovery closed 2.7 percent higher at $28.01 on the Nasdaq on Tuesday ahead of the quarterly results.

(Reporting by Paul Thomasch, editing by Matthew Lewis)