Even with 'Despicable Me,' NBC Universal third-quarter profit falls [Updated]
Despite strong performance from its movie studio and theme parks, NBC Universal's third-quarter operating profit tumbled 15%. The lower earnings were largely due to an unfavorable compairson to the year-earlier period and higher spending on programming to try to jump-start the limping peacock TV network's prime-time schedule.
[For the record at 8:31 a.m.: An earlier version of this post stated NBC Universal's third-quarter profit drop was largely due to substantially higher spending on programming. It was largely due to an unfavorable comparison to the year-earlier period. Higher programming costs also contributed to the figures.]
But the investment in new programming has not paid off. NBC's big bets for the new fall season, including "The Event" and "Outlaw," have failed to win huge audiences. Instead, NBC's broadcasts of NFL football have kept the network in the ratings game.
The media company, owned by industrial giant General Electric Co., on Friday reported operating profit of $625 million for the period ended Sept. 30. That compared with $732 million for the year-earlier period. Revenue for NBC Universal was flat at $4.06 billion.
In a conference call with analysts, General Electric Chief Financial Officer Keith Sherin said NBC Universal had tough comparisons with the third quarter of 2009, which included a gain from the company's sale of its stake in the A&E Networks. "The operating performance was better than reported," Sherin said.
The standout division for the third quarter was the Los Angeles-based film studio, Universal Pictures, and theme parks. The movie "Despicable Me" was a box-office bonanza, and attendance at the Universal Studios theme parks was up by double-digits, with crowds swarming to the openings of the new Harry Potter and King Kong attractions.
NBC Universal's cable TV division performed well. Bravo had its best quarter ever, GE said, and financial news network CNBC's profit was up 5%. Advertising to local TV stations was also strong.
GE is in the process of turning over its controlling interest in NBC Universal to Philadelphia cable giant Comcast Corp. Sherin said the company was cooperating with federal regulators scrutinizing the proposed joint venture and was hopeful that the deal would close by the end of the year. After the merger, Comcast will own 51% and GE will retain 49% of NBC Universal.
Overall, GE saw its profit for the third quarter plummet 18% to $2.06 billion. Revenue of $35.9 billion was down 5% compared with the year-earlier period, short of analysts' expectations.
-- Meg James