TORONTO - Corus Entertainment Inc. (TSX:CJR.B) delivered a slightly higher profit in the fiscal fourth quarter as the major broadcaster's radio division faltered again because of the recession's squeeze on advertising.
The Toronto-based company, which owns pay television stations and other media entities, posted $18.7 million in profit or 23 cents a share for the period ended Aug. 31, up from earnings of $17.4 million or 21 cents a share last year.
This was off from analysts expectations of 32 cents per share for the quarter, according to nine estimates compiled by Thomson Reuters.
In the quarter, the company set aside $5.4 million for restructuring costs in the radio division, bringing the total to $8.6 million for the year.
Corus has been reducing costs and streamlining its radio division, which includes well-known stations such as CKNW in Vancouver, CKOI in Montreal and Q107 in Toronto.
Revenue for radio fell to $60 million from $68.5 million last year.
"The challenge they've had on the radio side is the revenues have been down quite significantly," said David Shore, an analyst at Research Capital Corp.
"There are lots of fixed costs in the radio business, so they've been right-sizing the costs to recognize the current revenue environment that we're in."
Most of the cost cuts logged in the fourth quarter should stick over the longer term, said John Cassaday, president and chief executive officer.
"We think that the fixed costs we took out are permanent," he told analysts in a conference call Thursday.
"You can expect to see continued positive year-over-year comparisons on our radio expenses versus fiscal 2009."
However, he said Corus will have to contend with "variable" cost cuts that are in effect right now, including wage freezes and unpaid days for employees, which will be reinstated in 2011.
Overall, Corus revenue for the quarter increased to $195.2 million from $185.8 million as higher sales in television operations more than offset a decline from radio.
That beat Thomson Reuters analysts' estimates which pegged fourth-quarter revenue at $185 million.
Shares of Corus ended the day 2.1 per cent lower, down 37 cents, to $17.43 on the Toronto Stock Exchange.
Corus' television operations, which include specialty cable channels like W Network and CosmoTV, were boosted by growth in subscriber revenue and contributed $135.5 million to the quarter's overall sales.
Cassaday said plans to unveil kids channel Nickelodeon in Canada next month, and a rebranded Drive-in Classics cable channel into a more female-oriented station, will drive further growth.
"We expect the combination of great programming, strong marketing campaigns and continued solid growth in digital cable adption to allow this momentum to continue," Cassaday said in a discussion of the first quarter period.
"We also plan to continue a discliplined approach to managing our costs."
Corus also operates YTV, Treehouse, VIVA, Cosmopolitan TV, as well as Movie Central and HBO Canada in western Canada.
As it wrapped up its fiscal year, Corus said it saw an overall net loss for 2009 of $56.6 million or 71 cents a share, down from a profit of 129.8 million or $1.57 per share in 2008.
Corus said the loss for the year included a $175 million broadcast license and goodwill impairment charge recorded in the third quarter.