Corus Entertainment turned in a mixed financial report on Thursday, with improvements in television, a decline in radio and reduced profit expectations for the 2015 financial year that began Sept. 1.
The Toronto-based company reported it had $23.7 million of net income and an adjusted profit of $26.8 million in the fourth quarter of its 2014 financial year, which ended Aug. 31.
Corus said its total revenue for the three months ended Aug. 31 was $201.6 million, up from $181.9 million a year earlier, including the impact of several acquisitions.
The company’s TV division experienced higher revenue and operating profit in the summer quarter but its radio division saw declines on both counts.
It said its financial results for the full fiscal 2014 were below its internal expectations and, as a result, Corus is lowering its guidance for the 2015 financial year from the previous estimate.
The new 2015 segment profit guidance range has been lowered by $40 million, to between $300 million and $320 million.
“Looking ahead, although we have lowered our segment profit guidance for fiscal 2015, we are encouraged that with the recent repositioning of key large market radio stations, ongoing ratings strength on our core TV networks and our entry into new markets, we are well positioned to deliver growth and increase the value of our strong brands,” said Corus CEO John Cassaday, in a statement.
RBC Capital Markets said the fourth-quarter results were well below its forecast, mainly because of soft TV advertising. RBC had estimated $171 million of revenue from the television segment, but that came in $11 million lower at $160 million.
The specialty TV channel operator has blamed a tough national advertising market for adding pressure to revenue growth.
Corus also faces the changing habits of viewers, as more people turn on streaming video services like Netflix, instead of through its pay TV services HBO Canada, The Movie Network and Movie Central.
In the summer, Corus launched a retention offer to keep movie channel subscribers onboard after their introductory discount ended, even though they’re considered to be mainly low-margin customers.
The company is also facing scrutiny from some analysts who are concerned that Corus could be negatively impacted by U.S. media company Time Warner’s decision to offer HBO Go in the United States through an over-the-top model that goes around cable providers.
Some analysts have suggested that HBO, which licenses its brand name and TV series to Corus in Canada, could eventually deliver content directly to Canada through its own streaming service sometime in the future.
If that were to happen, it would likely take several years, because new HBO programming is under an exclusive licence in Canada to Corus and Bell Media until 2018.
