WRAPUP 1-Results at Canada's Astral, Corus take divergent paths

Thu Apr 11, 2013 9:54am EDT

* Corus profit plunges as television revenue slips

* Astral reports solid growth in TV, outdoor advertising

* Astral says BCE deal should close by June, end July latest

By Alastair Sharp

TORONTO, April 11 (Reuters) - Two of Canada's biggest independent media companies handed in very different earnings report cards on Thursday, with profits plunging at Corus Entertainment Inc while rival Astral Media Inc's earnings jumped 9 percent.

Astral, which is waiting for regulators to rule on a revised proposal to be acquired by BCE Inc, said growth at its main television operation and smaller outdoor advertising unit more than offset a slip in radio revenue.

By contrast, Corus revealed a debt refinancing that further undercut quarterly earnings already hurt by poor television unit performance, but should place the company on firmer financial footing.

The two companies compete to sell their television content to cable and satellite companies, and each own radio stations.

Astral is the single largest provider of content to BCE, which has moved aggressively to secure ownership of news, sports, films and other content distributed via its television and Internet services.

Astral and BCE hope to close their deal by the start of June, but gave themselves rights to postpone it until the end of July.

Astral's net profit rose to C$38.3 million ($37.6 million), or 68 Canadian cents a share, from C$35.0 million, or 63 cents a share, a year earlier.

Excluding the Bell-Astral transaction and other costs, the Montreal-based company's earnings rose 8 percent to C$41.2 million. Revenue rose 2 percent to C$237.1 million.

Canada's broadcaster regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), will open a public hearing on the planned takeover in May, after BCE earlier agreed to divest itself of a swathe of Astral's TV and radio assets.

Astral puts the value of the assets BCE plans to retain at C$2.08 billion.

TALE OF TWO COMPANIES

Corus, whose content is primarily targeted at women and children, said net income attributable to shareholders fell to C$5.9 million ($5.8 million), or 7 Canadian cents per share, from C$31.6 million, or 38 Canadian cents per share, a year earlier.

Total revenue fell almost 11 percent to C$183.7 million. Revenue at its main television business tumbled 12 percent.

Adjusted income, which does not include the cost of its debt refinancing, was C$24.4 million, or 29 cents a share.

Analysts on average expected Corus to earn 36 cents a share on revenue of C$199.7 million, according to Thomson Reuters I/B/E/S.

RBC Capital Markets analyst Haran Posner said the miss was driven mainly by weak television earnings and a fall in merchandise sales, and that advertising revenue fell despite management guidance of low single-digit growth.

Corus, controlled by the Shaw family, which also runs cable company Shaw Communications Inc, is looking to rein in costs as it struggles with unstable audience trends.

Corus said in March it would buy some French-language television assets and take full control of other programming in a three-way deal with Shaw and BCE, which has been forced to divest some of its planned Astral purchase to win regulatory approval.

Astral gained about a penny in early trading to C$48.89 on the Toronto Stock Exchange. They had jumped sharply to near BCE's offer price last March before sinking back after the initial rejection in October. They jumped again after the two companies revised the deal and passed other regulatory hurdles.

Corus' shares were down 88 cents at C$24.75. The stock has gained some 17 percent since October 2012.