CanWest posts increase in net earnings, revs
Earnings up 14%, revs hit $158.8 mil
Net earnings for the quarter were C$44.6 million ($30.4 million), or 20¢ per share, up 14% from the $26.6 million, or 18¢ per share, recorded the previous year. Revenues were $158.8 million, up from $147.7 million the previous year.
For the nine-month period, net earnings were $92.3 million, or 62¢ per share, a 15% jump from $80.4 million, or 54¢ per share, reported on a pro forma basis for the same period last year.
Revenues for the period were $243.9 million, up from $238 million.
The results were in line with expectations, said Ben Dube, an analyst with Canaccord Capital in Montreal. Solid growth figures in CanWest's Canadian and Australian operations were partially offset by a reduction in earnings in New Zealand.
Kiwi bug
"There's a little bug in New Zealand," he said, related to economic woes and disappointing auds. "They're working on that, talking about restructuring," Dube said. The company was also "penalized in the short term" by startup-related losses from TV3 in Ireland, TV4 in New Zealand and Global Prime in Canada.
In a conference call, CanWest reps told analysts that Global Prime should break even next year and TV4 is targeted for breaking even, while TV3 will likely take an additional year to get into the black.
On the positive side, broadcast operating profits at Global Television increased 9% in the third quarter to $36.4 million. Global VP for finance and chief financial officer John Maguire noted that the "Seinfeld" factor is still evident: Although this quarter was a strong one, it doesn't look as impressive when compared to last year's, which was boosted by the "Seinfeld" finale. "The basis for comparison is a little bit distorted," he said.
Net earnings got a boost from a $10.2 million break fee, the consolation prize that came out of CanWest's failed bid to take over Canadian specialty channel giant NetStar Communications earlier this year. (The operating results and per-share information are all reported on a pro forma basis to reflect the reduction of CanWest's holdings in Network Ten in Australia last year.)
Broadcast operating profit for the third quarter fell to $51.4 million, down 4% from $53.6 million for the same quarter last year. And for the nine-month period, broadcast operating profit fell 8% to $157.8 million.
