Turner Broadcasting System’s fourth-quarter and year-end earnings were undercut by a one-time charge for unplugging its Checkout Channel, a news show tailored for display in grocery stores (see related story).
Fourth-quarter earnings fell 30% to $ 30 million (4 cents per share) in 1992 from $ 43 million (11 cents) in 1991 after the company took a one-time $ 16 million hit for shutting down the network.
Full-year net income fell to $ 78 million (30 cents) in 1992, from $ 86 million (24 cents) in 1991.
Absent the one-time charge, fourth-quarter and full-year 1992 net income would have totaled $ 46 million and $ 96 million, respectively.
Fourth-quarter revenues totaled $ 538 million, up 33.8% from $ 402 million in the year-earlier period. Revenues for the year rose 20% to $ 1.8 billion from $ 1.5 billion in ’91.
Operating profit dropped to $ 85 million in the fourth quarter from $ 98 million the year before, while full-year operating profit slid to $ 289 million from $ 297 million (the 1992 figures again reflected the one-time charge).
TBS chairman Ted Turner said the 1992 results reflect heavy investment in new businesses, including the startup of the Cartoon Network, featuring shows from the Hanna-Barbera animation library, which Turner acquired in 1991.
“This (investment) is the best way to ensure long-term growth, and we will continue this practice in 1993,” Turner said. “Some of the results already are apparent. For the first time, international business has generated over 10% of consolidated revenue and the Cartoon Network is beginning to show some very promising viewership and advertising trends.”
Analyst Tom Wolzien of Bernstein Research said he was comfortable with the results.
“The Checkout Channel wasn’t clicking, so they were smart to cut their losses ,” he said. “Their long-term growth lies in the Cartoon Network — which is doing very well — and international expansion as the domestic services start to mature.”
Turner Class A lost 75 cents yesterday to close at $ 21.75 a share.
Operating profit for the entertainment segment was $ 176 million, an 11% increase over 1991. Revenue totaled $ 847 million, up 19% from 1991.
Advertising revenue for the segment increased 16% to $ 495 million, primarily due to an increase in the rates charged per thousand viewing homes, an increase in the amount of national inventory sold on TNT and an increase in the viewing audience.
Operating profit of CNN, Headline News and CNN Intl. advanced 8% over 1991 results; however, operating profit for the entire News Segment — which was affected by the writedown of the Checkout Channel — decreased 8% to $ 155 million.
Revenue for the segment totaled $ 536 million, an increase of 12% from the prior year primarily due to increased advertising and subscription revenue from CNN and Headline News and to the growth of CNN Intl.
Syndie revenue totaled $ 259 million, a 35% increase over 1991 primarily due to a $ 64 million increase in domestic and international homevideo revenue and an $ 11 million increase in theatrical revenue (primarily the international release of “Tom and Jerry: The Movie”). Even so, the segment posted an operating loss of $ 16 million.
Sports segment revenue increased 57% over the prior year, to $ 83 million, primarily due to the performance of the Atlanta Braves, who for the second straight year won the National League pennant.