Corus sees TV ad rebound in Q1

Corus Entertainment Inc. reported quarterly results Friday that showed TV ad revenue increasing 3.6 per cent, which Canaccord Genuity analyst Aravinda Galappatthige said came as as a surprise. He said it’s “especially encouraging given that this is the seasonally largest quarter. It appears that strength in Global drove the beat.” Corus’ overall revenues increased two per cent in the first quarter to $467.5 million, up from $457.4 million it reported at the same time last year. Overall net income was down to $66.8 million in the three months ending on Nov. 30, from $85 million in the same quarter a year ago. Radio revenues were down slightly, to $41.3 million from $41.9 million, meaning the overall revenue growth was driven by television, with that segment bringing in $426.2 million, up from $415.5 million in Q1 2018. “Our strong fall schedule combined with continued progress implementing our advanced advertising and data solutions led the way in Q1, as we maximized our audiences and effectively monetized those same audiences and benefited from recent improvement in television advertising demand,” CEO Doug Murphy said in a conference call with analysts. Murphy, who previously told analysts he expected the TV ad market to stabilize, said its conventional station Global “was really the star of the quarter.” Another strength for the company came out of its deal for Hallmark Cards Inc.’s movies and TV shows, including its stable of TV Christmas movies, which drove viewership in specialty. “W claimed the top spot among specialty channels across the key demos, driven by the Hallmark Channel countdown to Christmas, and was the number one most-watched channel in Canada on weekends, surpassing all conventional and sports networks,” Murphy said. He also told analysts Historia and Séries+, the channels the company unsuccessfully attempted to sell last year, were growing. “As regards the Competition Bureau’s decision .. unfortunate, but we’ve moved on. Those are strong channels, they’re performing well.” Murphy noted the company is ramping up production of original content, aiming to produce 11 series this year, compared to four last year. He also gave an update on the company’s ad tech efforts, as it continues to beta-test its targeted ad platform, called Cynch. “In Q1, 15 per cent of English television advertising was generated through targeted audience-based buying. We generated $42 million through audience-based buying in the quarter. That’s up 68 per cent over prior year,” he said. Murphy also said Corus is now using its carriage agreements to ensure it gets the set-top box data it needs for the platform from TV providers. “We’re including access to data… in all of our deals,” he noted. The overall results were well ahead of expectations, RBC Capital Markets analyst Drew McReynolds said. “While one quarter in conventional television does not make a trend, the culmination of improved ratings, cyclical advertising strength and the seasonal boost in demand has undoubtedly put Corus on a stronger footing for F2019,” McReynolds said. The results also beat expectations from Desjardins analyst Maher Yaghi, who said they reflect that “the economy’s strength is supporting the advertising environment in Canada and that tight expense management can produce decent results in terms of profitability.” But, he added, that in “our view, the company still lacks a clear, stable path to growth.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Corus sees TV ad rebound in Q1

News | January 11, 2019

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Corus sees TV ad rebound in Q1

News | January 11, 2019

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