Corus Q1 results fall short of expectations due to weak TV advertising, CEO says
Corus Entertainment Inc. says its first-quarter results fell short of expectations as some of its television advertisers adjusted their spending priorities during the final months of 2017.
“The advertising industry continues to re-assess and recalibrate as marketers evolve their media modelling strategies to optimize the mix of TV, radio and digital media elements,” Corus CEO Doug Murphy told analysts.
He said longer-term TV advertising bookings were on a good pace heading into the fall programming season and appeared headed for modest growth.
“However, as the quarter progressed, we saw a shift towards shorter-term buys ... (and) as we approached the end of the calendar year it also became apparent that certain advertising commitments would not be fulfilled as forecast.”
Corus publicly traded stock dropped to its lowest level in nearly two years after the announcement.
At mid-morning, Corus was at $10 on the Toronto Stock Exchange, down about nine per cent from the Tuesday close but up from the post-announcement low of $9.75. The stock hasn’t closed below $10 since February 2016.
Murphy said Corus is actively pursuing several initiatives to change the way it does business with advertisers but it needs to do so with partners such as advertising agencies and cable companies.
“We can’t just snap our fingers and have the complete roll-out done. That’s where I think we all need to be somewhat patient,” Murphy said.
He said the weakness in TV advertising more than offset gains in other parts of the Corus business, which also includes one of Canada’s largest private-sector radio operations and the Nelvana animation and publishing business.
The company reported a firstquarter profit attributable to shareholders of $77.7 million, or 38 cents per diluted share, for the quarter ended Nov. 30, up from $71.1 million, or 36 cents per share, a year ago.
However, on an adjusted basis, Corus says it earned a profit attributable to shareholders of $78.9 million, or 38 cents per share, for the quarter, down from an adjusted profit of $80.8 million, or 41 cents per share, a year ago.
Revenue at the television and radio media company totalled $457.4 million, down from $468.0 million in the quarter a year ago.
Television revenue fell to $415.5 million compared with $425.6 million a year ago, while radio revenue slipped to $41.9 million compared with $42.4 million in the same quarter a year earlier.