By Adriano Marchese
Corus Entertainment, a Canadian mass media company, has announced a rise in net income for the first fiscal quarter, although revenue fell due to lower TV ad revenue. This decline is expected to continue into the next quarter.
In the three-month period ending on November 30, the company reported net income of 32.7 million Canadian dollars ($24.4 million), or C$0.16 per share, compared to 31.4 million Canadian dollars, or C$0.16 per share, in the same quarter last year.
Adjusted earnings came in at C$0.20 per share, exceeding analysts’ expectations of C$0.14 per share.
Despite the rise in profit, total revenue declined from C$431.2 million to C$369.9 million. However, this was consistent with analysts’ projected decline to C$372.7 million.
Corus’ television segment, its largest revenue source, saw a 15% decrease in revenue during the period, reaching C$342.4 million. Radio revenues also fell by 7% to C$27.5 million.
CEO Doug Murphy explained that TV advertising revenue was in line with their first-quarter outlook, but was still impacted by a weak advertising market across the industry.
“While we have limited visibility on the timing of an advertising recovery, we anticipate that our supply of premium scripted content will return to normal in the second half of this fiscal year,” Murphy said.
Although production is now underway following the settlement of labor actions by Hollywood writers and actors unions, Corus warned that macroeconomic uncertainty and delays in the delivery of new episodes of scripted TV programming will continue to impact TV advertising revenue in the second quarter.
As a result, the company expects a high-single to low-double digit percentage decline in TV ad revenue compared to the previous year. While mitigation initiatives will be put in place, visibility remains limited for the time being.
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