Music up, movies flat in strong Seagram qtr.

NEW YORK — Seagram Co. Ltd. earned $161 million in its second quarter ended Dec. 31, it said Wednes-day, boosted by a $64 million profit on the sale of Putnam Berkley and a turnaround in Universal’s music group.

The profit compared with a loss of $26 million a year earlier, although the comparison was distorted by a big re-engineering charge in 1995. Seagram said its operating income before interest, taxes and one-time items rose 14.6% to $337 million in the quarter on 5% higher revenues of $3.75 billion.

The earnings improvement occurred in both the beverage group and the entertainment group: Entertainment’s operating income rose 13% to $150 million, while beverage income rose 9.5% to $380 million.

Universal Pictures showed only minimal growth, however, increasing its operating income (before interest, taxes, depreciation and amortization) just 1.5% to $65 million on 1% lower revenue of $999 million.

The studio’s quarterly performance reflected the poor box office performance of both “The Chamber” and “Daylight,” Universal’s two releases in the period. While “Daylight” has done well overseas and may break even, analysts say, Seagram is believed to have taken a write-down on “The Chamber” in the quarter. The company de-clined comment.

Additionally, Universal’s television division has stepped up its production activity, and that would have raised costs, a spokesman said. The studio’s performance was helped by video and international box office revenues from “The Nutty Professor” and “Twister,” Seagram said.

The studio is “still on its path of long-term restructuring,” said Cowen & Co. analyst Harold Vogel.

By contrast, Universal’s music group is already showing signs of a recovery after a slump over the past couple of years caused both by the downturn in the North American music retail market and the costs of investing in new artists.

For the quarter, operating income rose 66% to $45 million on 41% higher revenue of $465 million, due to better performances from both Geffen Records and Interscope, the company said.

“Universal’s investment in its Music Group’s new labels and artists this past year led to significantly higher reve-nues and profits in the quarter,” Seagram CEO Edgar Bronfman Jr. said in a statement. Bronfman made no com-ment on the performance of the studio.

Universal’s theme parks also did better in the quarter, Seagram said, although their performance was masked by the sale of Putnam in early December. As a result, the “recreation and other” division (which included theme parks and publishing) suffered a slight dip in operating income to $40 million on 6.6% higher revenue of $319 million.

On Wall Street, analysts said the quarterly profit was in line with expectations, and the stock fell 12¢ to $39.12. The stock has been strong over the past few months, and Seagram’s repurchasing plan appears to be partly the cause. A spokesman said Wednesday that Seagram had repurchased 1.8 million shares at an average price of $36 in the December quarter.

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