Studio sees strong year despite key pics falling short

Even the mighty King Kong couldn’t fight off the troubles at the Peacock, as a weak quarter at the network sent overall revenue and profits at NBC Universal for a tumble.

Profits at the entertainment company slid from $860 million to $801 million, a decline of 7%, and revenue dropped 3% to $4.2 billion in the fourth quarter.

Nearly every NBC U unit finished the year strongly besides NBC. Profits at the net dropped an astonishing 60% in the fourth quarter, excluding news, and were down 26% for the year.

Profits at the company’s news, cable, film and theme park operations spiked a combined 23% in the quarter.

In a call with analysts, GE cited rebounds at Telemundo and MSNBC as partly offsetting the network slide. Company also noted the strong performance of the USA net and Sci Fi Channel in the quarter, as well as continuing robust ratings for “My Name Is Earl.”

NBC has endured a dramatic drop this year, most notably with a 16% loss in viewership among adults 18-49 compared to last year. Company has embarked on a major restructuring to try to vault out of fourth place among the major nets.

Overall at GE, earnings came in shy of analyst expectations. Profit dropped 46% to $3.06 billion for the quarter, largely because of a $3 billion sale in its insurance business, and dropped 3% to $16.35 billion for the year. Revenue was up 3% for the quarter and 11% for the year.

NBC U was the only GE segment to see profits slide in the quarter.

Company cited a strong year for Universal — the unit had about $900 million in profits for the year — but the studio has also had a number of recent releases that have yet to match expectations; “Munich,” “Jarhead” and “The Producers” have not yet drawn B.O. commensurate with their budgets.

Universal has gotten a boost from “King Kong,” which has grossed $500 million worldwide and which the company expects to earn a total of about $600 million.

For the coming quarter, the company forecast a revenue increase of 10%-15% for U but a drop in profits of about 10%. Its pic biz is likely to gain momentum from Focus Features’ “Brokeback Mountain,” which has earned $33 million in limited release and seems poised for more kudos.

Also in the quarter, all eyes will be on NBC’s Olympics coverage. Or so NBC hopes — the company is gambling on a large public appetite for the Winter Games and will air more than 400 hours of coverage across broadcast and cable.

In the call, GE chief financial officer Keith Sherin estimated the Torino Games would bring in additional revenue of $50 million-$100 million, a relatively small amount. But he predicted that the 2008 Beijing Summer Games, for which the net got an earlier start, could bring in as much as $1 billion in revenue.

He said the company still believes that Olympics coverage is a smart bet because it strengthens affiliates and leads to other fees. “This is a very profitable franchise for us,” Sherin said.

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