Corus Entertainment Inc. saw its second-quarter profit jump 81% on the strength of its broadcast segment, even as its content division suffered a 24% drop in revenues.
The specialty TV and radio company’s net earnings were $35.4 million or 41 cents per share in the second quarter ended Feb. 29, up from $19.5 million or 22 cents per share a year earlier.
The results came well above analysts’ estimates of 24 cents per share.
Revenue rose 2% to $178.7 million from $174.7 million, as a 4% rise in TV and radio sales was offset by a drop at Corus Content.
CEO John Cassaday said specialty advertising rebounded in the quarter, thanks in part to the W Network and TeleLatino channels, although adult advertising for Teletoon fell off following the loss of the popular TV show Family Guy to a competitor.
Looking ahead, the company is “very enthusiastic about the prospects for growth in advertising directed to the women’s demographic, and we see continued high single-digit growth overall for specialty through fiscal ’08 and fiscal ’09,” Cassaday said during a call with analysts.
“We are in the midst of developing a strong portfolio of women’s services to capitalize on this subsegment growth.”
Much of that hope is pinned to the Cosmopolitan TV channel, which Corus launched in February and is currently in three million households.
In the radio segment, Quebec continues to be the major challenge for Corus, “due largely to market conditions, not poor execution,” Cassaday said.
“Excess low-priced TV inventory along with poor economic conditions in general in Quebec are the reasons behind this softness.”
Cassaday also said he wasn’t too concerned about the possible impact of the Canadian Radio-television and Telecommunications’s hearings into the country’s TV landscape, which began Tuesday.
One of the key disputes at the hearings is a controversial proposal by Canada’s main television networks for new fees on cable TV bills that could add between $5 and $10 a month to a consumer’s average monthly TV watching costs.
When it came to fees for carriage, Cassaday said, “our view, from business point of view, is: Whatever you want to do on fee for carriage, CRTC, that’s up to you, but make sure it’s not a zero-sum game, that whatever increases you award to CTV and Global and CBC [don’t] come from the hides of the specialty operators, who are doing a superb job of introducing Canadian programing to the system and serving customers in a niche way.”
In announcing the financial results, Corus said its Television division contributed quarterly revenues of $104.6 million, compared to $100.2 million last year, led by specialty advertising growth of 8% and subscriber revenue growth of 1%.
Corus Radio revenues were $61.5 million, up from $58.8 million last year, while Corus Content revenues were $13.2 million, down from $17.3 million. The Content segment distributes television programs and sells and licenses related products and rights.
