Corus misses estimates as expenses jump

Profits at media and broadcasting conglomerate Corus Entertainment Inc. came up short of analyst estimates in the second quarter of 2017, as the company’s expenses more than doubled — increasing 125 per cent — to $265.5 million for the three months ended Feb. 28.

The rise in costs offset an 86 per cent growth in overall revenue to $368.2 million, which didn’t quite reach the $379 million average estimate pegged by analysts in advance of Thursday’s filing.

Income attributable to Corus shareholders fell to $24.9 million, or 12 cents per share, from $102.2 million, or $1.17 per share, in the same period last year. However, the company’ profit in the second quarter of 2016 was boosted by the $86.2 million sale of its Pay TV business.

Thursday’s results include Corus’s January 2016 purchase of media assets from sister company Shaw Communications Inc. for $2.65 billion, which accounts for a significant portion of its revenue and expense increases.

“We have adeptly managed the integration of our structure, systems and processes right on schedule,” said CEO Doug Murphy, on an investors’ call. “This, coupled with strong expense controls and integration synergies, have translated into solid margins this quarter.”

Second quarter profits at its television division climbed 25 per cent, which amounted to a one per cent decline when adjusting for the addition of the former Shaw Media assets.

The segment revenue for television decreased five per cent, and Corus’s TV advertising revenues also dived four per cent in the quarter on an adjusted basis.

Toronto-based Corus was founded as a spinoff from Shaw in 1998, and owns the Global Television Network and specialty TV services and radio stations.