January 13, 2011 / 3:24 PM / in 7 years

Ad rebound boosts Astral; cable growth aids Cogeco

* Astral Q1 EPS C$0.93 vs C$1.14 yr ago, cons C$0.93

* Astral revenue up 7 pct to C$267.1 mln

* Cogeco Q1 EPS C$0.95 vs cons est C$0.87

* Q1 rev up 4.5 pct; ups 2011 rev view to C$1.44 bln

* Cogeco sees difficult conditions in Portugal continuing

TORONTO, Jan 13 (Reuters) - A rebound in advertising spending helped Canadian broadcaster Astral Media ACMa.TO meet earnings expectations, while strong cable subscriber additions aided Cogeco Inc (CGO.TO), which raised its 2011 forecasts on Thursday.

“Toward the end of fiscal 2010, we saw encouraging signs of recovery in the Canadian advertising markets,” said Astral Chief Executive Ian Greenberg. “Clearly, that momentum carried through to our first quarter.”

But despite 16 percent growth in television ad revenue, the Montreal-based company ACMb.TO saw quarterly profit slide 17 percent, hurt by an increase in operating expenses and comparison to a year-earlier fee accrual reversal.

Cogeco’s net income slipped 30 percent to C$16 million ($16.2 million), or 95 Canadian cents a share. The company cited a favorable tax adjustment of C$9.6 million in the year-earlier period.

Cogeco said revenue rose 4.5 percent to C$342.8 million. Revenue at its listed Cogeco Cable CCA.TO unit also increased 4.5 percent, to C$331.5 million.

Cogeco Cable added 70,690 revenue generating units (RGU) in Canada and 20,179 in Portugal, where its Cabovisao competes with state-owned Portugal Telecom and ZON Multimedia ZON.LS. Pricing wars in Portugal have squeezed earnings and profit margins.

Cogeco said economic conditions in Portugal continued to be difficult and it has not yet detected clear signs of a sustained economic recovery.

The company, which is also based in Montreal, aims to buy Quebec radio stations from Corus Entertainment (CJRb.TO), a move Astral is seeking to block in federal court. [ID:nWNAB3893]

Including revenue from the Quebec radio stations buy and the improved performance of the cable sector in the first quarter, Cogeco said it now expects 2011 revenue of C$1.44 billion, up from its previous forecast of C$1.38 billion.

Cogeco reported negative cash flow of C$24.3 million for the first quarter but said it expects an increase in 2011 free cash flow to $80 million. The company also upped its forecast for 2011 operating income before amortization by 4 percent to $560 million.

Cogeco said its cable subsidiary spent around $30 million in the quarter to upgrade and expand its network.

For the first quarter, Astral’s consolidated net income was C$53.3 million ($54 million), or 93 Canadian cents per share, compared with C$64.6 million, or C$1.14 per share, a year ago.

Revenue rose nearly 7 percent to C$267.1 million.

Analysts on average were expecting the specialty-TV and radio company to earn 93 Canadian cents per share on revenue of C$269.7 million, according to Thomson Reuters I/B/E/S.

Operating expenses rose 15 percent to C$177.7 million.

Shares of Astral closed at C$41.39 on Wednesday on the Toronto Stock Exchange. ($1 = 0.9863 Canadian dollar) (Reporting by Alastair Sharp in Toronto and Abhiram Nandakumar and Sayantani Ghosh in Bangalore; editing by John Wallace)

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