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Aug 5, 2002  •  Post A Comment

Veronis Suhler offers bullish forecast
Veronis Suhler Stevenson’s annual Communications Industry Forecast calls for a consumer and advertiser rebound in the second half of 2002. In what is a more bullish outlook than most on Wall Street, the report calls for 4.8 percent in total U.S. communications spending to $610 billion compared with a 0.3 percent decline in 2001-the first decline in a generation. Total communications spending will grow at a moderate compounded annual rate of 5.5 percent to reach $760 billion by 2006, driven by a 6.5 percent annual compounded rise in consumer end-user spending and a more modest 4 percent compounded annual growth in advertising, which now accounts for less than 30 percent of all spending on communications. Despite this spring’s robust upfront ad market, Veronis Suhler Stevenson is calling for only a 4.1 percent rise in broadcast TV expenditures to $42.9 billion, and an annual compounded growth rate of only 3.8 percent to 2006, when it reaches nearly $50 billion. Cable and satellite TV spending will fare better, rising 9.5 percent to $76.9 billion in 2002 and growing at an annual compounded rate of 7 percent to $106.3 billion by 2006.
Comcast seeks to boost ad revenues
Comcast officials said they are determined to make advertising a bigger contributor to revenues, pointing to the 13 percent increase in second-quarter ad revenues, 10 percent of which were generated by its aggressive cable interconnects. They have said in the past they will competitively sell its 22 million subscriber footprint once Comcast acquires AT&T Broadband later this year alongside the major broadcast networks. Comcast’s second-quarter cash flow grew 15 percent to $653 million on a 12 percent gain in overall revenues to $1.5 billion.
Disney reports soft numbers for 2Q
Trading of The Walt Disney Co. stock was temporarily halted at $16.83 a share after the company jolted investors with news that it will miss its fiscal fourth-quarter targets. Citing “softness” in the current period, such as declines in travel and the general economy, Disney said it expects its pro forma fourth-quarter net income to fall below year-ago levels. All of Disney’s primary fiscal third-quarter numbers were down from a year earlier, meeting analysts’ estimates. Net income was $363 million, or 18 cents a share, compared with $527 million, or 25 cents a share, a year ago. Fiscal third-quarter revenues fell 3 percent to $5.8 billion from $6 billion a year earlier. Although current ad pacings at ABC’s owned TV stations are up in the high single digits, the ABC TV Network’s record make-goods kept it from participating in robust scatter markets. ABC has reserved 15 percent of its inventory to sell in future scatter markets.