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Oct 18, 2019

Corus quarterly profit falls to $22.9M from $33.7M a year ago

Foreign capital necessary for Canada's media and TV industry: Corus CEO


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TORONTO -- Corus Entertainment Inc. shares dropped 11 per cent Friday after the TV, radio and studio company announced a lower profit for the fourth quarter and a disappointing preview of the pre-Christmas TV advertising season.

The Toronto-based company's B shares were down 65 cents at $5.18 at midday, erasing gains they've made since Oct. 8 and putting them at the low end of their 52-week range on the Toronto Stock Exchange.

Analyst Drew McReynolds wrote that RBC Dominion Securities had lowered its target price for Corus shares by $1, to $7 per share, amid a "moderating" assumption for growth.

"While Q4/19 results were in line with our expectations across the board, the seasonally important Q1/20 outlook for television advertising was below expectations," McReynolds wrote after the company's quarterly conference call.

He added that some of the revenue declines from the company's regulated television business are expected to be mitigated by multiple initiatives in newer unregulated businesses, including double-digit revenue growth from merchandising and distribution as well as potential revenue growth from radio.

Earlier, Corus announced that it earned $22.9 million in its latest quarter, down from nearly $33.7 million in the same quarter a year ago, as its revenue edged lower.

The parent company of Global Television, specialty TV channels, radio stations and the Nelvana animation studio said the profit amounted to 11 cents per diluted share, down from 16 cents in the same quarter last year.

Revenue for the quarter was nearly $377.5 million, down from nearly $379.1 million a year ago.

Revenue from the Corus television business, which includes Nelvana and non-animated TV production, fell to $343.8 million in the quarter, from $344.6 million. Radio revenue slipped to $33.7 million from $34.4 million.

On an adjusted basis, Corus says it earned $27.9 million or 13 cents per share for the quarter, down from an adjusted profit of $39.5 million or 19 cents per share in the same quarter last year.

Analysts on average had expected a profit of 12 cents per share for the quarter, according to financial markets data firm Refinitiv.

For its full year, Corus earned nearly $156.1 million or 74 cents per diluted share on nearly $1.69 billion in revenue, compared with a loss of $784.5 million or $3.77 per diluted share on nearly $1.65 billion in revenue a year earlier.

On an adjusted basis, the company says it earned $181.0 million or 85 cents per share for its most recent financial year, compared with an adjusted profit of $238.4 million or $1.14 per share a year ago.