PxPixel
NBC parent GE shares in sharp selloff - Broadcasting & Cable

NBC parent GE shares in sharp selloff

Author:
Publish date:

According to Reuters, General Electric Co. lost ground on Wall Street Thursday after reporting
mixed results in first-quarter earnings.

Despite a sharp selloff, GE's NBC television network became the latest to see
signs of a recovery in the advertising market, which has been reeling since late
2000 under the weight of weaker corporate spending and broad economic
weakness.

"We are seeing advertisers' interest pick up," GE chief
financial officer Keith Sherin said.

"We do have some momentum, and we are encouraged by that," he added.

NBC was the beneficiary of the Winter Olympic Games, which is typically a cash cow
for the network that carries the event.

But the company also said spot advertising rates had been weaker in the first
quarter.

Sherin noted that spot ad rates, often called the scatter market, were weaker
throughout 2001 than rates for advertising sold in advance of the fall season,
or upfront sales.

However, he said, the spread was narrowing in the first quarter.

In the current quarter, scatter prices were 6 percent above the upfront
market, he said.

For GE, a strong performance from its NBC unit is essential.

While NBC generates a fraction of GE's total revenues and earnings, it is one
of the economically sensitive businesses that GE expects to stage a rebound as
the U.S. economy recovers.

GE has said it believes such businesses are poised for an "explosive" rebound
in 2003.

Related