July 14, 2011 / 1:22 PM / 7 years ago

UPDATE 3-Astral, Corus results boosted by television

* Corus profit up 39 percent, boosts dividend, shares jump

* Astral profit edges higher after radio restructure cost

* Netflix threat still looms

(Adds Astral conference call, share price moves)

By Alastair Sharp

TORONTO, July 14 (Reuters) - Two of Canada’s biggest media companies, Corus Entertainment and Astral Media, posted higher quarterly profits on Thursday, benefiting from strong growth in television subscribers and advertising.

Corus Entertainment (CJRb.TO) reported a 39 percent rise in third-quarter profit, driven mainly by television advertising revenue and subscriber fees, and raised its annual dividend by 16 percent. Its shares jumped 2.4 percent in morning trade.

Astral Media’s ACMa.TO profit rose slightly, helped by strong growth in television and outdoor advertising while weighed by a restructuring cost for its radio segment. Its shares were less buoyant, moving 0.2 percent higher.

Both companies — traditional middlemen between creators of content such as Hollywood studios and cable and satellite distributors — are facing a growing threat from Netflix (NFLX.O), which offers content via the Internet.

While Netflix’s Canadian catalogue is still limited, it is signing deals for first-run films from the likes of Viacom’s VIAb.N Paramount Pictures and has bought exclusive North American rights for a Kevin Spacey television series.

Corus and Astral share rights to HBO Canada, with Astral selling it to distributers in the east of the country and Corus selling it in the west.

On a conference call with analysts and media, Astral executives said the company had acquired a strong slate of new content from U.S. studios and that it only signs deals including all rights, including for Internet distribution.

Asked if content costs had risen as a result of Netflix’s entering the bidding, the executives only said Astral would maintain margins by cutting costs in one area if they rose in another.

Montreal-based Astral’s net income rose to C$49.3 million ($51.4 million), or 87 Canadian cents a share, in its third quarter to May 31, from C$48.5 million, or 85 Canadian cents, a year earlier.

Astral, which operates television, outdoor advertising and radio business units, said consolidated revenues grew 6 percent to C$268.0 million.

Excluding a $5 million restructuring charge for its radio unit, Astral had earnings of 93 Canadian cents a share.

On that basis, analysts had on average expected earnings of 93 Canadian cents a share on revenue of C$267.2 million, according to Thomson Reuters I/B/E/S .

Astral said its overall television revenue rose 6 percent to C$154.0 million, while advertising revenue grew 11 percent.

Its outdoor advertising unit grew sales by 22 percent.


Corus, a Toronto-based specialty television producer, said its net income rose to C$39.2 million, or 47 Canadian cents a share, in the three months to May 31, compared with C$28.3 million, or 35 Canadian cents, a year earlier.

Consolidated revenue grew 7 percent to C$211.8 million.

Analysts, on average, had expected Corus to earn 45 Canadian cents a share on revenue of C$208.9 million.

In the television segment, specialty advertising revenue climbed 15 percent, while subscriber revenue rose 5 percent.

Corus’ board approved an increase of 12 Canadian cents in its annual dividend.

At the new rate, the expected dividend on an annual basis for the company’s Class A and Class B Shares is 86.5 Canadian cents and 87 Canadian cents, respectively, up from the previous rate of 74.5 Canadian cents and 75 Canadian cents.

Corus’s Class B shares gained 2.1 percent to C$21.09 by midday on the Toronto Stock Exchange. Prior to the results, the stock had lost more than 9 percent since the start of 2011.

Astral’s class A shares were up 0.1 percent at C$37.90. It is down almost 10 percent so far this year.

    $1 = 0.959 Canadian Dollars Additional reporting by Bhaswati Mukhopadhyay in Bangalore

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