UPDATED: GE Earnings Disappoint, Though NBC Universal Shines
Finance Arm Sinks General Electric
By Robert Marich -- Broadcasting & Cable, 4/11/2008 11:53:00 AM
Poor corporate earnings at General Electric put all of Wall Street in a funk Friday, but its NBC Universal division was a bright spot with a 3% gain in operating profit for the first quarter.
The big news was that GE’s net earnings slumped 6% to 43 cents per share, missing analysts’ forecasts of 51 cents by a wide margin and sending GE’s share price down in early trading. The industrial conglomerate also lowered its full-year earnings outlook.
Its key earnings problem is in its giant finance arm. GE’s fortunes move the entire stock market since it is one of 30 stocks used to calculate the closely-watched Dow Jones Industrial Average.
The 3% rise in profit was the sixth straight quarterly gain for NBCU, to $712 million for the three months ended March 31 from $691 million in the same quarter a year ago. NBCU segment revenue also rose 3% to $3.584 billion.
In an internal e-mail, NBCU president and CEO Jeff Zucker told employees: “Our performance was driven by very strong results from our entire cable portfolio -- both entertainment and news -- and from the NBC network. Parks and resorts also had an impressive quarter, doubling operating profit despite the economic slowdown, and hulu.com launched to the public with rave reviews and has sold out its advertising inventory.”
The Zucker e-mail also said NBC Entertainment posted a “solid quarter,” citing Knight Rider, Saturday Night Live and the network's three late-night talk shows. He also cited NBC News and Today.
“The NBC Local Media Division continued to transform its business model with the acquisition of LX.TV, which produces local entertainment programming, and Skycastle Entertainment, which develops custom marketing plans for local advertisers,” Zucker wrote, adding that Telemundo “turned in its 11th consecutive month of primetime ratings growth.”
Noting the general economic weakness, Zucker wrote, “Like most businesses, we are seeing the effect. This means we are going to have to be smarter and more vigilant about staying ahead of the economic downturn.”
