TORONTO – Despite gains in net profit (thanks largely to the sale of non-controlling interests in Food Network Canada) and specialty TV advertising revenue in its fiscal third quarter, Corus announced Thursday that the company will miss the low-end of its profit guidance for FY2013.
Net income attributable to shareholders for the three months ended May 31, 2013 was $89.9 million, a 108% increase compared to $43.2 in the third quarter of 2012. The hefty jump is a result of the company’s sale of its non-controlling interests in the Food Network Canada for $55.4 million.
Without the Food Network Canada sale, adjusted net income attributable to shareholders would have been at $34.5 million, or $0.41 per share, for the quarter.
Corus reported consolidated revenues for the third quarter of $200.1 million, down 2% from $204.1 million compared to the same quarter last year. Both television and radio revenues declined during the third quarter, to almost $153 million from $154.7 million for television, and to $47.1 million for radio revenue, compared to $49.3 million in Q3 2012. Consolidated segment profit was $68.2 million, a decrease of 10% from $75.7 million last year.
“The third quarter was challenging on a number of fronts, most notably, advertising softness in radio continued and our merchandising, production and distribution businesses faced tough year-over-year comparatives," Corus president and CEO John Cassaday said in a release.
Revenues from advertising and subscriber fees saw slight increases for the third quarter compared to 2012 (2% and 2.2%, respectively), however that was offset by a 26% decrease in merchandising, distribution and other income. Corus-owned Movie Central saw a year-to-date increase of 33,000 subscribers, for a third quarter total of 1,099,000.
“Despite these impressive gains in our core television broadcast business, our expectations for a stronger back half have not materialized and we will miss the lower end of our segment profit guidance,” said Cassaday, adding that free cash flow guidance remains unchanged.
“Looking ahead, we are excited about the opportunity to expand our business through acquisitions that will enable us to enter the Ottawa radio and Quebec specialty television markets, subject to CRTC approval," said Cassaday, the latter referring to the company’s agreement to acquire the remaining ownership of Teletoon , Historia and Séries+, as well as the remaining 49% interest in ABC Spark from Shaw Media.
