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Corus returns to profit as ad, subscriber revenue picks up

Corus Entertainment posted a third-quarter profit as advertising and subscriber revenue recovered from last year’s slump in both its radio and television businesses.

The Toronto-based company, which owns channels such as Sundance and Nickelodeon, had a profit of $31.4 million compared with a loss of $145 million in the year-ago period, when Corus had a one-time charge related to a license fee.

Revenue rose 12% to $195.4 million, it said.

The company expects growth to continue into the fourth quarter boosted by strong advertising revenue in its specialty channels, especially those targeted at women. Radio ads are also likely to continue to improve, led by Ontario, though Western Canada has also begun to contribute to gains, Corus said.

“Ad sales continue to pace well ahead in our fourth quarter as the overall economy continues to recover,” said John Cassaday, president and chief executive. “We are confident in our ability to achieve our earnings guidance for the full fiscal year.”

However, a decline in merchandising revenue when compared with a strong fourth quarter of last year will offset the growth in ad spending in the final three months of the fiscal year, the company said.

In the third quarter, speciality ad revenue in the television business rose 14%, while the number of subscribers increased by 13%.

Ad revenue was particularly strong from the children’s television segment gaining 19%. Sales of merchandise linked to hit programs such as the Backyardigans, Babar and Bakugan also jumped 19%.

Revenue in the radio division rose 9%, with an 83% jump in auto-related advertising in Vancouver boosting results in the West.

Source: QMI Agency