Proving that big acquisitions can still produce big market-moving short-term gains, NBC Universal on Friday turned in the biggest quarterly sales gain among parent company General Electric’s 11 major business lines.
Announcing second-quarter financial results that brightened up the stock market Friday, GE said NBC U total sales rose a hefty 47% from $1.96 billion a year ago to $2.87 billion thanks to its addition of Universal’s film, TV and theme-park assets. However, division’s second-quarter operating profits were up a more modest 12% to $768 million, compared with the same, Universal-free, period in 2003.
Company said it’s standing by its prediction of some $500 million in cost savings over the next several years, with $100 million in synergies on track for 2004 and $300 million in $2005. Such savings should make a direct improvement to the bottom line.
The newly merged broadcaster/studio predicted its third-quarter profits would be up between 10% and 15%, thanks in large part to its August Olympic ad windfall and upside synergies from new film and cable TV business lines.
Peacock should record an Olympic-sized $20 million operating profit off some $900 million in Games-related sales.
Lion in wait
GE CEO Jeffrey Immelt wouldn’t bite on the question of whether it would be lodging a bid for MGM, a studio and library it has previously coveted.
In true GE fashion, Immelt remained coy, insisting he’s happy with NBC U as is. “When I look at the company, I love the set of businesses we have. We don’t need a big deal right now to hit all the numbers we’ve got or to execute strategies we have,” Immelt told analysts on a Friday morning conference call.
Overall, the industrial conglom, and economic bellwether, reported second-quarter 2004 profits of $3.9 billion, 3% over last year’s Q2 tally. Sales were up 11% to $37 billion. “This is the best economy we’ve seen in years,” Immelt said in a statement. Only GE’s energy and insurance divisions failed to produce double-digit sales and profit growth in the quarter.
Touting its quarterly achievements, Peacock noted that it brought in some $5 billion in ad sales during the upfront season across its various broadcast and cable nets, fueled by strong gains at Bravo and Spanish-lingo net Telemundo. Cable sales in particular were up 20% in the quarter.
Aided by some 52 million viewers for the May 6 “Friends” finale, NBC noted that it maintained control of the adult 18-49 demo during the quarter by a 10% margin over its nearest competitor, thanks in large part to “The Apprentice.”
Ailing Telemundo continued on the recovery trail, doubling its weekday primetime ratings among adults 18-49 over last year, with some of its highest ratings in that demographic in a decade.
Bravo similarly doubled its average audience among adults 18-49 over last year, while newly absorbed USA Network upped its adults 25-54 audience by 13%.