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GE’s Immelt Says NBCU Buoyed by Well-Performing Cable, DVD Businesses

Jul 15, 2005  •  Post A Comment

The Chairman of NBC Universal parent General Electric said Friday that while the broadcast network continues to suffer ratings weakness, it wouldn’t adversely affect NBCU or GE overall because other elements in the entertainment conglomerate are performing well.

Speaking at GE’s second-quarter earnings conference call, GE Chairman and CEO Jeffrey Immelt said that for NBCU to record double-digit growth, “We have to get an improvement in prime-time ratings,” and added that the network must “do a better job on the programming front.” However, he added, “You have a very robust business model” at NBCU.

Indeed, NBCU was able to overcome the ratings weakness of NBC’s prime-time schedule by relying on strong results from its DVD and cable operations.

Overall, the division reported a 27 percent rise in segment profit to $979 million, while revenues climbed 35 percent to nearly $3.9 billion. It helped GE post a 24 percent rise in second-quarter profit to $4.65 billion, on a 13 percent increase in revenue to $41.6 billion.

GE officials during the call sought to clarify reports in the media about NBC’s 2005 upfront performance, saying the network booked around $2 billion this year, versus $2.7 billion last year. However, they also noted they held back on some inventory they plan to release later.

Looking ahead, GE executives said they expect operating profit at NBCU to be up 15 percent to 20 percent on the strength of NBC News and the cable networks, film business and theme parks. They said the broadcast network will continue to face challenges, but Mr. Immelt said the NBCU business model is a proven one that will help dampen volatility at the broadcast network.