* Astral revenue slips ahead of acquisition by BCE
* Corus says ad revs weak in children's programming
By Alastair Sharp
TORONTO, July 12 Sluggish advertising demand
continued to hit revenues at Canadian television and radio
companies in the latest quarter as economic uncertainty spurred
big brands to hold off on spending, forcing broadcasters to cut
costs sharply to get profit growth.
Corus Entertainment Inc, which focuses on content
for children and women, had an 11 percent fall in specialty
advertising revenue in its third quarter. Its shares fell
sharply on Thursday after it released its results.
"Our specialty advertising revenues in the quarter were
impacted by soft demand in the kids segment," Chief Executive
John Cassaday said in a statement.
He attributed the company's 7 percent rise in profit to
"rigorous cost controls".
Competitor Astral Media Inc, which is in the
process of being acquired by Canadian telecom giant BCE Inc
, also reported a drop in revenue, while posting a 3
percent rise in third-quarter profit. Its television advertising
revenue fell 7 percent.
Astral shares were flat.
The specialty-TV channels of Astral and Corus, which have
typically devoted much of their schedules to popular U.S.
programming, have had this comfortable niche usurped by Netflix
and other Internet offerings, which buy a more limited
array of content and deliver it for a low monthly price.
Astral Chief Executive Ian Greenberg took comfort in the
company's ability to notch profit growth "in spite of the
challenging advertising market in which we operate".
Montreal-based Astral is being bought by BCE in a C$3
billion ($2.9 billion) deal, as Canada's largest telecom company
moves to own more of the programming carried over its media
platforms and expands its presence in French-speaking Quebec.
The deal is awaiting regulatory clearance.
Astral's net income rose to C$51.2 million, or 91 Canadian
cents a share, missing the average analyst expectation of
C$1.02. Its profit was C$49.5 million, or 87 Canadian cents a
share, a year earlier.
Consolidated revenue fell 1 percent to C$265.5 million, also
"Consistent with Corus's results this morning, better
television margins cushioned the revenue weakness" at Astral,
RBC Capital Markets analyst Drew McReynolds said in a note.
Corus posted net income attributable to shareholders of
C$43.2 million, or 51 Canadian cents a share, up from C$40.4
million, or 49 Canadian cents a share, a year earlier.
Revenue slipped 4 percent to C$204.1 million. In the
television segment, subscriber revenue fell 2 percent.
The profit figures were broadly in line with what analysts
had expected, but revenues disappointed.
Corus, controlled by Alberta's Shaw family, which also runs
cable company Shaw Communications, will be Canada's
last major independent media company if the Astral-BCE deal is
approved, having so far avoided the consolidation sweeping
through Canada's media and telecom industries.
The company's children's cable programming includes the
Treehouse and Nickelodeon Canada channels.
Shares of Corus, which has a market value of C$1.85 billion,
fell 6 percent to C$21.88 on Thursday morning on the Toronto
Stock Exchange. Astral was flat at C$49.10.