NBC Uni a weak point for GE's Q1
NBC Uni a weak point for GE's Q1NEW YORK -- General Electric Co., the 80% owner of NBC Universal, delivered improved first-quarter financials late last week that set a new company record. NBC Uni was the only unit of the conglomerate that posted a profit decline, driven again by sluggish NBC primetime trends.
The 8% profit decline at the division came despite a 24% year-over-year revenue gain, the strongest improvement across the GE business.
Management also reiterated that for the full year NBC Uni should see roughly unchanged profit trends compared with last year.
GE reported a first-quarter profit of $4.3 billion, up 9% from the same quarter last year and matching analysts' expectations. Revenue jumped 10% to $37.8 billion.
NBC Uni achieved $654 million in quarterly operating profit, down 8% year-over-year, while GE's five nonentertainment businesses each achieved double-digit earnings growth. Revenue at NBC Uni rose to nearly $4.5 billion.
"Most of the NBC business is good. News, cable, film and other-category profits were up," Argus Research analyst Dana Richardson said. "But primetime and TV production segment profit dropped. They need to fix the primetime business and resolve that dichotomy."
GE chairman and CEO Jeff Immelt said the company needed to "continue a primetime turnaround" at NBC. But Keith Sherin, chief financial officer and senior vp, said management remains pleased with NBC Uni overall.
"NBC Universal revenue was a little higher than (our) guidance," Sherin said. Excluding the financial impact from the Olympics, NBC's results would have shown a 5% revenue improvement and 6% profit improvement, according to company estimates.
Immelt also lauded the "diversified business mix and quality programming" at NBC Uni.
Bright points for the business that management emphasized were strong ratings and performance from cable channels USA, Bravo and Sci Fi Channel; cable news ratings on the rise; theatrical release and DVD performance improvements driven by "King Kong," which in the U.S. alone grossed more than $41 million at the boxoffice in the first quarter, and more globally. "Kong," released on DVD in early April, also will boost the second quarter after selling 6.5 million DVDs in the first two weeks in release and grossing $12.8 million in U.S. video rentals during the same time.
The film business contributed $300 million of operating profit in the quarter, up 13% year-over-year.
These factors, and a "decision to exit our DreamWorks relationship" helped offset the impact of the Olympics in the quarter, Sherin said.