January 11, 2011 / 1:12 PM / in 7 years

UPDATE 3-Stronger TV advertising boosts Corus revenue

* Q1 EPS C$0.56 vs analyst forecast C$0.57

* Q1 revenue up 8 pct at C$240.6 mln

* Shares close 3.7 pct higher, dividend kept steady

* Advertisers return, but still fragile (Adds details from conference call, closing share price)

By Alastair Sharp

TORONTO, Jan 11 (Reuters) - A boost in television advertising and subscribers helped Canadian media company Corus Entertainment Inc CJRb.TO post an 8 percent rise in first quarter revenue on Tuesday.

Shares in the Toronto-based company, a specialty television producer with a focus on content for children and women, jumped to close 3.7 percent higher on the Toronto Stock Exchange.

Corus, which is previewing content from Oprah Winfrey’s cable network ahead of a March 1 launch, said it expects double-digit growth in advertising revenue in the current quarter for its specialty television operations, including youth brand YTV, cartoon channel Teletoon and country music channel CMT.

Its pay TV business, Movie Central, finished the quarter with 976,000 subscribers after a free preview period, a 2 percent increase on a year ago.

The company expressed confidence it would exceed a target of 1 million subscribers in 2011, initially a goal for 2010.

Television accounts for around three-quarters of all Corus revenue. The remaining input comes from radio, which was weaker in part due to its sale of Quebec radio stations to Cogeco CGO.TO, which is due to close on Feb. 1.

The radio unit of rival Astral Media ACMa.TO said on Tuesday it had appealed to Federal Court over the broadcast regulator’s approval of that sale. [ID:nWNAB3893]

Spending on advertising in Canada fell in 2009 as companies tightened their belts, but a second straight quarter of strong ad revenue growth for Corus may indicate a more robust recovery. [ID:nN27141854]

Corus’s chief executive, John Cassaday, told an analyst conference call that while ad sales growth was generally positive companies were still being cautious with their marketing budgets.

“Advertisers are continuing to make their bookings a little bit later than they have historically,” he said. “Like everyone else on the planet they’re waiting to see how sustainable this economic recovery is.”

NET INCOME LOWER

Net income fell 37 percent from last year, when Corus benefited from special items, including C$30.4 million from the reversal of a regulatory fee accrual and a recovery from income-tax rate changes.

For the quarter ended Nov. 30, net income was C$46.2 million ($46.5 million), or 56 Canadian cents a share, compared with C$73.9 million, or 91 Canadian cents a share, a year ago.

Revenue was C$240.7 million, up from C$222.3 million.

The results were largely in line with analysts’ average expectations for earnings of 57 Canadian cents a share on revenue of C$238.4 million, according to Thomson Reuters I/B/E/S.

The company reiterated its September guidance of free cash flow of more than C$100 million in fiscal 2011 and consolidated segment profit of between C$285 million and C$295 million.

Corus also said it would keep its monthly dividend payout steady in February, March and April at 6.21 Canadian cents on its class A shares and 6.25 Canadian cents on its class B shares.

The company, which is controlled by Calgary’s Shaw family through its ownership of the majority of Corus’s class A shares, opened a new headquarters on Toronto’s lake shore in September. [ID:nN30196360]

Corus’s class B shares, which rose around 10 percent last year, closed 3.7 percent higher at C$23.49 on the TSX.

$1=$0.99 Canadian Additional reporting by Abhiram Nandakumar in Bangalore; editing by Rob Wilson

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