GE dims, but NBC Uni shines
Behemoth's smallest unit turns a Q2 profit on strength of films, cableNBC Universal turned in 1% profit growth in the second quarter, while corporate parent GE took a 6% hit in earnings.
Profit at NBC Universal, the littlest segment at GE, a $276 billion company, was $909 million. Revenue rose 7% to $3.9 billion.
During a conference call with analysts Friday, GE CEO Jeff Immelt hailed NBC Universal's "seventh straight quarter of segment profit growth" and gave credit to a strong cable performance that offset weakness in local media.
On the film side, GE highlighted robust boxoffice performances from "Wanted," "The Incredible Hulk," "Forgetting Sarah Marshall" and "Baby Mama."
CFO Keith Sherin said second-half profit at the film studio will benefit from the healthy amount of money spent during the second quarter to market them. Upcoming this quarter are "The Mummy: Tomb of the Dragon Emperor," "Mamma Mia!" and "Death Race."
Surging results for USA, Bravo, Sci Fi Channel, Oxygen and MSNBC more than made up for sagging ratings at NBC — despite the popularity of "Heroes" and "The Office" — and a slight drop in revenue at the local stations.
"The strength in NBC continues to be in cable," Sherin said.
Sherin and Immelt also confirmed that they are expecting $1 billion in advertising sales related to the upcoming Olympics, with $850 million going to the broadcast and cable networks and $150 million to the local stations. They also noted that GE has sold $700 million in industrial products because of its relationship with the Olympics.
But even with an Olympics boost, GE is only forecasting up to 5% profit growth in the third quarter0.
"The real swing factors here are the Olympics and our film performance," Sherin said. "We feel good about both."
NBC Universal's 1% profit growth makes it the fourth-best performing of GE's seven segments, and its 7% revenue growth also is fourth best.
GE's overall profit was $5.1 billion on revenue that rose 11% to $46.9 billion. (partialdiff)