NBCU Reports Profitable Q3

Oct 8, 2004  •  Post A Comment

NBC Universal booked a 24 percent increase in third-quarter operating profit on a 173 percent surge in revenue as parent General Electric on Friday reported the first full financial period for the recently created entertainment giant.

NBCU’s operating profit came in at $536 million versus a year-earlier figure of $431 million. Revenue surged to nearly $4.1 billion from a year-earlier $1.5 billion. The results take into account the combined results of NBC and Vivendi Universal Entertainment, which merged in May to create NBCU.

Within the overall unit, NBC reported an operating profit of $390 million on revenue of $2.6 billion, while the Universal arm booked an operating profit of $140 million on revenue of $1.5 billion.

NBC’s broadcast of the Summer Olympics helped the group generate revenue of around $927 million, though the production and airing costs led to a $38 million pretax loss. The company noted that 86 percent of households in the United States tuned into the Games at some point, and that prime-time viewing was up 13 percent over the Sydney Games in 2000.

Nearly all of NBCU’s television units performed well, executives said during a conference call Friday, with the company’s cable networks and NBC News divisions posting operating revenue gains.

Prime-time ratings at NBC are facing some tough competition during the season, but were about where executives forecast, said GE Chairman and CEO Jeff Immelt. However, he conceded, “We’re No. 2, but we don’t want to be No. 2.”

Mr. Immelt said the NBC owned-and-operated television stations were perhaps the weakest part of the television portfolio in the quarter, and he blamed that on the stations not serving regions that attract big political advertising spending.

GE said it was able to squeeze out $55 million in synergies from NBCU, and was likely to exceed its 2004 goal of achieving $100 million in synergies. The company said it was on track to reach its $300 million target in 2005.

NBCU’s results helped GE overall to report an 11 percent rise in profit to nearly $4.1 billion, or 38 cents a share, compared with year-earlier figures of $3.6 billion, or 36 cents a share. Revenue rose 15 percent to $38.3 billion.