Corus Entertainment Inc. said profit fell 35% in its radio segment and 5% in its television segment in the fiscal Q3, and the company posted a hefty overall loss on a broadcast license and goodwill impairment charge in its radio segment.
Corus lost $145 million or $1.81 a share in the latest quarter, including the $175 million charge, compared with earnings of $37.7 million or 45 cents a year earlier. Revenue totalled $195.4 million in the quarter; analysts were expecting revenue of $208 million. In the year-earlier quarter, Corus reported revenue of $207.8 million.
Corus operates in three major market segments: television, radio, and content, which participates in the distribution of television programs and the sale and licensing of related products and rights. In the third quarter, the television segment contributed $129.8 million of revenue and the radio segment contributed $65.5 million, down 1% and 15%, respectively, versus a year earlier.
Analysts had predicted a decline in radio revenue in the quarter. TD noted that radio advertising seller Canadian Broadcast Sales reported revenue for the third quarter that was down 14% over the prior year. Canadian Broadcast Sales represents Corus and Rogers Communications Inc. (RCI) and covers nearly 60% of the radio market in Canada.
When Canada’s Astral Media Inc. reported Q3 results last week, it noted that advertising sales continued to be hurt by an industry-wide drop in demand even though earnings and revenue were up slightly year-over-year. Its television revenue rose 3%, while radio revenue declined 4%.
Corus released its financial results a day after announcing a $40-million purchase of two specialty channels from CTVglobemedia. The acquisition of Drive-In Classics and SexTV is subject to approval by the CRTC.
“We continue to position our company for growth in an improving economy,” Corus chief executive John Cassaday said in a statement.
“The acquisition of two digital networks, our ratings strength in television and radio, our successful launch of HBO Canada and its influence on pay TV growth and the global expansion of Bakugan are all indicators of the underlying strength of Corus’ assets.”
Corus, with about 2,000 employees, was spun off from Shaw Communications Inc. , Canada’s second-biggest cable TV operator, in 1999. Though publicly traded, Corus is controlled by the Calgary-based Shaw family, which owns the majority of its shares.
The company has become a market leader in specialty television and radio with additional assets in pay television, advertising, TV broadcasting, children’s book publishing and children’s animation.
The company’s brands include YTV, Treehouse, W Network, CosmoTV, VIVA, Movie Central, HBO Canada and Nelvana. Corus radio stations include CKNW in Vancouver, CKOI in Montreal and Q107 in Toronto.
Shares in the company fell 85 cents or 6.2 per cent to $12.89 in early trading at the Toronto Stock Exchange.
