* 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 Two of Canada's biggest
independent media companies handed in very different earnings
report cards on Thursday, with profits at Corus Entertainment
Inc plunging 81 percent while rival Astral Media Inc
reported a 9 percent jump in earnings.
Shares of Corus plunged 5 percent, while shares of Astral
were little changed.
Astral, which is waiting for regulators to rule on a revised
proposal to be acquired by BCE Inc, Canada's biggest
telecom provider and owner of the CTV television network, said
growth at its main television operation and smaller outdoor
advertising unit more than offset a slip in radio revenue.
Astral said it saw no reason for the good times to end as it
expects to lure more TV subscribers with its recently launched
video streaming services, which allow customers to watch movies
on mobile devices such as Apple's iPad, something that should
help bring in more advertisers and perhaps boost ad rates.
"When I look at bookings I'm optimistic...that we should be
looking at mid-single-digit increases in advertising for the
balance of the year," Ian Greenberg, chief executive of Astral,
told analysts on a conference call.
By contrast, Corus said earnings, already hurt by poor
television unit performance, were affected by a C$25 million
pre-tax charge on a debt refinancing that should place the
company on firmer financial footing.
Corus said TV revenue fell 12 percent, hurt by dismal
performance in the children's segment, which along with women's
programming makes up the bulk of its offering.
"A problem well defined is a problem half-solved. To define
the specific problem it was kids, and more specifically the
entertainment sector," Corus CEO John Cassaday said on a call.
The two companies compete to sell their television content
to cable and satellite companies, and each owns 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
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.
The adjusted earnings of 73 cents a share topped the 71
cents average expected by analysts, while revenue was in line.
Canada's broadcaster regulator, the Canadian
Radio-television and Telecommunications Commission, 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
Astral puts the value of the assets BCE plans to retain at
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
Corus said its merchandise unit lagged after BeyBlade toys
failed to sell as well as they did in a wildly successful
Christmas period a year ago.
Total revenue fell almost 11 percent to C$183.7 million.
Adjusted income, which does not include the cost of 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
RBC Capital Markets analyst Haran Posner said the miss was
driven mainly by weak television earnings and a decline in
merchandise sales, and that advertising revenue fell, even
though management guidance was for 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.
It said it would pay a monthly dividend of 8.5 Canadian
cents in May, June and July. On an annualized basis, the payout
is a more than 6 percent increase on its 2012 dividend yield,
according to Reuters data. That is much lower than the average
payout gain in recent years.
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
Astral shares slipped a few cents to trade at C$48.85 by
mid-afternoon on the Toronto Stock Exchange. Shares of Corus
lost C$1.10, a fall of 4.3 percent, to trade at C$24.53. The
stock has gained some 17 percent since October.