Analysts figured that the cable networks company would have discouraging numbers for Q4 — a period of soft ratings in a weak ad market. But they still may be disappointed by the report out this morning. Discovery reported net income of $250 million,  down 13.5% vs the last three months of 2013, on revenues of $1.68 billion, up 9%. The revenue number is below the Street’s $1.70 billion consensus estimate. And earnings at 38 cents a share missed expectations for 41 cents.

CEO David Zaslav remains upbeat. “Despite a more challenging U.S. market and significant foreign currency headwinds, our content portfolio once again drove audience gains and boosted our market share around the world,” he says. “As we move into 2015, we are confident that our long-term content investment strategy, strong global IP and brands, and local approach to markets will continue to drive our results and enable us to deliver additional value to shareholders.”

The U.S. Networks operation saw cash flow fall 7% to $405 million — partly due to rising programming costs — as revenues grew 1% to $745 million. Ad sales were down 3%, although distribution revenues increased 8% — due in part to the consolidation of Discovery Family (formerly The Hub). If you take the one-time events out of the picture, distribution revenues would have increased 6%, and the operation’s total revenues would have been down 1%.

The fast-growing International Networks operation struggled with foreign currency exchange problems vs the strong dollar, and rising costs, yet still fared better than the U.S. operation. Cash flow increased 11% to $329 million, on a 17% rise in revenues to $884 million. Ad sales improved 7% and distribution revenues were up 24%. If you factor out the currency exchange issues, and Eurosport which Discovery acquired early in 2014, then ad sales would have been up 10% with distribution +8%.