(Reuters) - Corus Entertainment Inc beat analysts’ estimates for quarterly profit on Friday, benefiting from the Canadian media company’s efforts to bolster its television business, sending its shares up 6 percent.
The Toronto-based company has been spending heavily to develop original content to attract the so-called cord-cutters who are shunning traditional cable bundle and opting for cheaper online streaming services such as Netflix Inc.
Advertising revenue increased 11 percent in Corus’ television business in the second quarter ended Feb. 28, fueling a 5 percent rise in the unit’s revenue to C$353.5 million ($264.5 million).
“We are advancing for own more content strategy through Nelvana and Corus Studios,” Chief Executive Officer Douglas Murphy said on a post-earnings call with analysts.
“Our owned content investments drive audiences on our networks and diversify our revenues through international content sales.”
Corus expects mid-single-digit percentage increase in television advertising revenue for the third quarter.
The company’s online push also paid off, with CEO Murphy highlighting a 22 percent jump in average monthly unique visitors to its Global News service on globalnews.ca.
But the company’s radio segment revenue remained under pressure, declining almost 8 percent in the quarter, with automotive advertising contributing the most to the fall.
Excluding items, Corus earned 7 Canadian cents per share, beating analysts’ average estimate of 5 Canadian cents, according to IBES data from Refinitiv.
Net income attributable to shareholders fell to C$6.3 million, or 3 Canadian cents per share, in the three months quarter ended Feb. 28 from C$40 million, or 19 Canadian cents per share, a year earlier.
Revenue rose 4 percent to C$384.1 million, topping estimates of C$373.80 million.
The company’s shares trimmed some gains to trade up about 5 percent at C$6.75 on the Toronto Stock Exchange. The shares have risen about 35 percent since the beginning of the year.
Reporting by Shanti S Nair in Bengaluru; Editing by Sriraj Kalluvila
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