October 22, 2009 / 3:02 PM / in 8 years

UPDATE 2-Corus profit gains thanks to TV subscriber growth

* EPS C$0.23 vs analyst forecast C$0.32

* Television revenue gets boost from HBO Canada launch

* TV advertising revenue still drops 10 percent (Adds background, CEO quotes)

TORONTO, Oct 22 (Reuters) - Specialty TV and radio group Corus Entertainment Inc CJRb.TO posted a higher quarterly profit on Thursday as subscriber growth in its television business helped offset a flaccid advertising market.

Corus said it earned C$18.7 million ($17.8 million), or 23 Canadian cents a share, in the three months ended Aug 31. That was better than the profit of C$17.4 million, or 21 Canadian cents a share, in the same period a year earlier.

The company said that in total, revenue rose to C$195.2 million from C$185.8 million.

Corus, which also owns the Nelvana animation house, said radio revenue fell 12 percent in the quarter and Chief Executive John Cassaday told analysts on Thursday that that part of the company’s business remains challenging.

Overall revenue at its much bigger TV business grew by 15 percent, helped in part by the launch of the popular HBO Canada channel, which drew new subscribers.

TV advertising revenues still dropped 10 percent in the quarter, reflecting the tough economy, which has pushed advertisers to cut their spending.

Some analysts have argued that people may be trying to save money during the recession by spending more time with their TV sets rather than going out for entertainment.

Corus reported 19 percent growth in TV subscriber revenue during the quarter.

Cassaday did not comment of the possibility of acquisitions, but he has said recently that Corus is interested in buying some of the specialty TV channels currently owned by struggling Canwest Global Communications CGS.TO, Canada’s biggest media company.

Earlier this month, parts of Canwest filed for bankruptcy protection in a bid to restructure the company’s C$4 billion debtload. Since then, speculation has mounted that the company may be broken up or forced to shed more assets to raise money.

As well, Cassaday said, “We did an excellent job controlling costs in fiscal 2009 and we will maintain this focus in 2010.”

Analysts, on average, had expect Corus to report earnings per share of 32 Canadian cents on revenue of C$185.5 million, according to Thomson Reuters I/B/E/S.

Corus shares dipped 40 Canadian cents to C$17.40 on the Toronto Stock Exchange.

$1=$1.05 Canadian Reporting by Wojtek Dabrowski; editing by Rob Wilson

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