NBC Universal boosts GE quarterly earnings
EmptyNEW YORK -- Financial growth at NBC Universal is accelerating, with fourth-quarter operating profit gains expected to be strong in the 10%-15% range, executives of parent company General Electric said in their quarterly earnings call.
GE on Friday reported a 14% increase in its third-quarter profit, helped by the fourth consecutive quarter of growth at its NBC Universal entertainment unit.
The call -- surprisingly to many -- didn’t feature any direct questions about the future of NBC Uni, which has repeatedly been tipped in recent years to come up for a possible sale down the line, even though GE management has repeatedly said it is happy with the unit’s momentum.
The Financial Times said that any consideration of a possible sale would only come after the 2008 Olympics.
Asked about possible future deal activity, GE chairman and CEO Jeff Immelt said he likes the conglomerate’s current portfolio of businesses. Immelt added that his team will continue to look at its collection of operations and “where there are businesses that we can’t run that well, (where) we think other people can run it better, we are going to look for opportunities to sell these businesses.”
GE posted net earnings of $5.5 billion, up 14% compared with the same quarter a year ago. Earnings from continuing operations rose 9%. NBC Uni’s segment profit also rose 9% to $589 million, which was at the high end of management’s previous projection for a gain of 5%-10%.
For the fourth quarter, GE management said NBC Uni should boost its operating profit 10%-15%.
GE’s total revenue from continuing operations increased 12% in the third quarter to $42.5 billion, with NBC Uni up 3% to $3.8 billion. For the fourth quarter, the company predicts 5% growth.
Immelt on Friday again lauded the “successful turnaround” at NBC Uni and highlighted the “successful launch of (NBC’s) new primetime television lineup, a strong cable performance and a slate of popular summer films.”
He added: “(NBC Uni head) Jeff Zucker and his team have done an excellent job improving the content, operating the business, and expanding the portfolio.”
In a note to NBC Uni employees, Zucker lauded the “superb” results, saying they were “driven by exceptional performances across every area of the company.”
NBC had “a great summer and is off to a good start to the new season,” with “Bionic Woman” tied as the top new show, while the firm’s entertainment cable networks continued their “outstanding” performance thanks to strong momentum at USA Network, Bravo and Sci Fi Channel, he said.
Meanwhile, CNBC is on the way to its most profitable year ever, according to Zucker’s memo. Plus, “film far exceeded our financial goals for the quarter, behind an amazing summer,” and NBC Uni’s theme parks unit had its best quarter in history, he said.
GE executives said on the call that network scatter advertising is up 25% right now, and the strong movie summer will bode well for NBC Uni’s holiday season.
For the first three quarters of 2007, NBC Uni earned $2.2 billion, 5% more than the profit it had recorded in the same period a year ago. GE’s overall profit for the same period expanded a stronger 9%.
Revenue for NBC Uni’s first nine months of the year are down 9% to $10.9 billion. That compares with the 12% gain for all of GE.