'Tough media space' smacks NBC Uni Q1
EmptyNBC Universal reported a 45% plunge in quarterly profit, vindicating analysts who have predicted that media conglomerates will as much as halve their profits this earnings season.
Although one-time charges accounted for much of the carnage reported Friday, GE CEO Jeff Immelt was down on the "tough media space" enough to say that the first-quarter results probably are indicative of what the full year will look like.
Not everything was weak, though, as cable TV properties USA, CNBC, Bravo, Oxygen, Sci Fi and MSNBC posted record results. Cable operating profit was up 19% overall.
"Cable was strong everywhere," GE CFO Keith Sherin said.
NBC Uni said revenue fell 2% to $3.5 billion as profit plunged to $391 million. One-time events included a write-down of its stake in Ion Media and fees related to broadcasting the Super Bowl, which Sherin called an "incredible ratings success" even though it represented about a $45 million "drag in the quarter."
He also said NBC Uni sold about 5 million fewer DVDs during the quarter than in the same frame a year ago, when "The Bourne Ultimatum" and "American Gangster" were hot sellers.
Theatrical releases also were weaker, but "the rest of the year looks a lot better," Sherin said. Things, in fact, already are looking up with the strong performance of "Fast & Furious."
The cost of TV programming also increased significantly, given that the year-ago frame was cheap because of the WGA strike.
Sherin also boasted that its joint venture Internet property Hulu is the No. 2 video site behind YouTube. Hulu's success, though, hasn't gone unnoticed, and YouTube said Wednesday that it is teaming with Sony, Lionsgate and others to beef up its offering of premium content, as opposed to the user-generated videos that made it such an early hit with Web surfers.
CEO Jeff Zucker, in a letter to NBC Uni employees, noted some victories not highlighted by GE brass, including an extra $38 million in earnings that isn't part of GE's report because it only owns 80% of the company.
Zucker said Hulu "has exploded," with almost 1 billion page views during the quarter, and he stressed NBC's "brilliant" coverage of the Opening Ceremony at the Beijing Olympics, "Saturday Night Live's" election "coverage" and the Oscar performance of "Milk."
He also noted that MSNBC beat CNN in primetime for the first time in total viewers and that CNBC boasted its highest ratings since 2001.
While NBC's primetime ratings haven't been so hot, new shows "Southland" and "Parks and Recreation" look promising.
Overall, GE reported earnings that dropped 35% to $2.8 billion on revenue that fell 9% to $38.4 billion. (partialdiff)