By Susan Taylor and Wojtek Dabrowski
OTTAWA/TORONTO, July 10 (Reuters) - Astral Media ACMa.TO on Thursday said quarterly profit jumped 21 percent, boosted by strong television advertising growth and the acquisition of Standard Radio, but revenues fell short of analyst estimates and the stock dropped 3.4 percent.
Montreal-based Astral became Canada’s biggest radio broadcaster with the C$1.1 billion acquisition of Standard Radio late last year. It operates 83 stations in eight provinces.
Ian Greenberg, the company’s CEO, said the Standard assets added C$56.1 million to overall revenue, which was in line with internal expectations. But radio stations in Quebec and the Atlantic provinces recorded a 7 percent drop in revenue.
“This is largely explained by the challenging market in the province of Quebec, which contracted by 3 percent in the quarter,” Greenberg told analysts during a conference call.
Overall, revenue at Montreal-based Astral rose 38 percent to C$233 million, which lagged analyst forecasts of C$244.7 million, according to Reuters Estimates.
Astral said it earned C$43.3 million ($42.9 million), or 75 Canadian cents a share, for its third quarter ended May 31. Fueled by acquisitions, that was up from C$35.9 million, or 67 Canadian cents, a year earlier.
Astral isn’t the first media company to complain about the conditions in Quebec. On Wednesday, Corus Entertainment Inc (CJRb.TO) said its radio operations in Western Canada performed well, but were offset by challenges in the Quebec market.
Closely watched earnings before interest, tax, depreciation and amortization, a measure of cash flow, climbed 41 percent in the quarter to C$82.2 million.
That fell short of analysts’ expectations for EBITDA of C$88.5 million, according to Reuters Estimates.
Astral stock fell 3.4 percent to C$29.91 on the Toronto Stock Exchange after the results were issued. The shares have shed 35 percent of their value so far this year.
Analysts are keeping a close watch on the financial results of Canadian media companies for signs that economic weakness is hurting their businesses.
On Wednesday, Corus reported stronger-than-expected results on television advertising growth and subscriber gains, and its stock rose.
Astral said quarterly revenue from its core television operations rose 5 percent to C$129 million and EBITDA rose 7.6 percent fueled by a 14 percent increase in advertising sales.
“We remain confident that the growth potential for pay TV remains strong,” Greenberg said, adding the company’s fall lineup includes popular shows such as “Entourage,” “Dexter” and “Californication.”
Radio revenue rose 151 percent to C$86.5 million as EBITDA surged to C$33 million from C$13.7 million.
Outdoor advertising revenue grew 39 percent to C$17.5 million and EBITDA climbed 45 percent to C$5.9 million.
$1=$1.01 Canadian Reporting by Susan Taylor and Wojtek Dabrowski; Editing by Frank McGurty