Revenue drops 26% in third quarter
A virgin couldn’t help NBC U get lucky this summer.
Despite big B.O. from “The 40-Year-Old Virgin” and other summer pics, the unit saw revenue plummet 26% in the third quarter. NBC was the main culprit, as net’s dramatic slide in primetime took its toll.
For the quarter ended Sept. 30, revenue at NBC U fell from $4.1 billion to $3 billion, while profits rose 13% to $603 million. Comparisons were slightly skewed because net broadcast summer Olympics in the third quarter last year.
Execs cited theme parks, cable and news as strong, and U punched well above its weight. Execs said profit on films jumped $50 million in the quarter. “Virgin” has taken in $104 million domestically and “The Skeleton Key” has earned $47 million, while Focus’ “The Constant Gardener” has rung up nearly $48 million.
In the news division, strong ratings for hurricane coverage also gave a boost.
But company was hammered by net’s underperforming primetime shows. In a call with analysts, GE chief financial officer Keith Sherin acknowleded a “rebuilding (of) prime programming” and said, “It’s going to be a journey as we work on the lineup.” Net has high hopes for fall skeins such as “My Name Is Earl.” Execs mostly declined to discuss failed negotiations to buy DreamWorks, but hinted that the deal was off. Exclusive talks to buy studio for a reported $1 billion broke down last month after what was said to be a disagreement over price.
“We like the company the way it looks today,” said GE chief exec Jeffrey Immelt.
Still, some in Hollywood think the deal makes sense and say discussions could be revived.
NBC U’s 3Q numbers paled against parent GE, where overall revenue was up 9%, to $42 billion, and profits jumped 23%, to $6 billion. The consumer finance and industrial units, which account for about 12% and 20% of GE revenue, respectively, were the strongest divisions. NBC U constitutes about 10% of GE revenue.
NBC U was the only unit at GE to see revenue drop in the quarter. Execs also cited it as the only business to fall below earnings guidance given last December.
The outlook for NBC U wasn’t any better for the fourth quarter, where the company forecast a 5%-10% drop in revenue and a 15% slide in profit. Immelt said he believed earnings at NBC U would be “kind of flat-ish next year as we deal with primetime issues.”
Shares of GE closed at $34.34 on Friday, up ¢32.