Subscriber and advertising revenue gains helped BET Holdings Inc. best Wall Street estimates with second-quarter earnings of $ 4.3 million or 21 cents per share, up more than 28% over the prior year.
Shares of the Washington, D.C.-based cable and entertainment company closed 25 cents higher at $ 18.88 on subdued volume of 3,500 shares, although earnings per share came in 2 cents above expectations, according to analysts’ estimates.
Revenues jumped 33% to $ 24 million for the quarter ended Jan. 31 while operating income increased a more modest 26% to $ 7.3 million, both due mostly to improvement at BET Cable Network, the company’s core business.
At the entertainment group, which includes BET Cable and BET Action Pay-Per-View, quarterly revenues leaped 33% to $ 22.7 million as ad sales rose 14% to $ 11 million. That reflects a 17% gain in national spot advertising, a 41 % rise in infomercial advertising and 18% drop in direct response advertising.
Subscriberrevenues surged 50% to $ 11.1 million, thanks to a 26% boost in subscriber revs at BET Cable and the acquisition of Action PPV last July. Operating income for the group grew 26% to $ 8.3 million although operating expenses climbed 38% to $ 14.4 million, including $ 2.4 million related to the Action PPV deal.
In the second quarter, BET Cable’s subscriber base stood at 34 million, up 10 % from the comparable year-ago period.
Despite a 30% quarterly rise in revenues to $ 1.3 million, BET’s publishing group — which owns Emerge and Young Sisters & Brothers — did not fare as well after higher sales personnel and production costs produced an operating loss of $ 900,000, about 13% wider than the year-ago quarter’s loss.
“Management anticipates additional operating losses related to the Publishing Group until its operations are fully established,” the company said in a statement.
In addition to its TV entertainment and publishing operations, BET has also started two filmed entertainment ventures and plans to launch a cable jazz channel next fall.