General Electric reported Friday that NBC Universal's
profits fell 15% in the third quarter to $625 million.
Revenues for NBCU were $4.1 billion, flat from a year ago.
In a note to NBCU employees, CEO Jeff Zucker said that
excluding special charges, NBCU's profit on an operating basis was up 5% and
marked the best third quarter since the merger of NBC and Universal more than
six years ago. A year ago, the transaction in which A&E Television Networks
acquired Lifetime boosted NBCU's revenue by 7% and operating profit by 5%.
"Given that the economy, although improving, is still far
from robust, these are excellent results driven by superior execution
throughout our operations," Zucker said.
GE is in the process of selling a controlling interest in
NBCU to Comcast Corp.
GE said that NBC's large investment in new fall programming
was paying off, with ratings up 4% and that the local ad market continues to be
robust, with sales growth in the double-digit range. Zucker added that NBC is
tied for No. 2. in the first three weeks of the season and the only
English-language network to grow year-over-year.
On the cable side, GE noted that strong original programming
propelled USA Network to be the top cable network for the 17th straight quarter
and that Bravo had its best quarter in its history. CNBC's profits were up 5%.
In the quarter, GE completed the purchase of 7.7% of NBCU
shares from Vivendi for $2 billion and completed a $5.1 billion debt offering.
Here is the text of Zucker's memo:
GE reported its earnings today, and I wanted to take the
opportunity to congratulate everyone on NBCU's very strong results. Looking
just at our operations, these are our best third-quarter results since the
NBC-Universal merger more than six years ago. Truly a record performance.
Although our segment profit as reported by GE shows us down,
this is driven by the impact of one-time, non-operating events and transactions
that took place in the third quarter of last year (such as the one-time gain
from the change in our interest in A&E Networks). On an operating basis,
our profit was up 32% versus last year (or 5% excluding the impact of charges
taken by certain divisions in the third quarter last year). Given that the
economy, although improving, is still far from robust, these are excellent
results driven by superior execution throughout our operations.We had exceptional performances from a number of our
divisions, including Cable Entertainment, Local Media, Film, and Theme Parks.
Cable Entertainment posted a double-digit increase in operating profit, behind
great results at each of our networks. Local Media was up an amazing 87%, as
increased revenues from a resurging local ad market hit the bottom line. Film
op profit was up 57%, driven byDespicable Me,
which performed well ahead of expectations. And Theme Parks had the best
quarter in its history, with op profit up 59%, the result of the new Harry
Potter attraction in Orlando and the new King Kong 360 in Hollywood.Here are some of the other highlights:
- USA was the No. 1 cable entertainment network for the 17th
quarter in a row, an incredible string of success, and Syfy finished the
quarter ranked No. 8 in adults 25-54
- Bravo had its best quarter ever and now has 20 consecutive
quarters of ratings growth, and Oxygen had its best 3rd quarter ever
- CNBC posted increases in both revenue and op profit, and
MSNBC continues to operate from a position of strength, beating CNN in
primetime for the 4th quarter in a row and beating CNN in total day for the
first time in a decade, while also launching a very exciting new marketing
- Through the first five weeks of the NFL season, Sunday
Night Football is averaging nearly 22 million viewers, the most for the first
five weeks of a primetime NFL package in 14 years
- NBC is tied for No. 2 through the first three weeks of the
new season, up 4% versus a year ago to make it the only major English-language
network to grow year-to-year
- Jay Leno continues to be No. 1 since returning to his old
timeslot, and Jimmy Fallon holds a 35% lead over CBS in his time period
- NBC News remains No. 1 across the board and recently
hosted a fantastic public-service programming event called Education Nation, an
effort that should make us all proud to be part of this company
- Telemundo has the highest-rated novela in its history with
Donde esta Elisa, and mun2 had its
best quarter in all key demos
There is so much to be proud of! Congratulations and thanks
again to everyone, because I know, whether you are part of one of the
businesses mentioned above or not, you are working hard to keep this company
great, and I truly appreciate it.At the same time we are notching these business successes,
our transition teams are hard at work preparing for the new NBC Universal.
We're on track for a close of the transaction with Comcast, hopefully by the
end of the year. As I'm sure you know, the timing will ultimately be determined
by the FCC and the Department of Justice. We'll have a clearer idea about timing
as we get into November.One other thing about the transition. You have received
information about your new benefits, and I urge you to pay attention: review
the information on the intranet, attend the benefits sessions, and enroll yourself
and your family in both the GE and the new NBC Universal benefits plans. I hope
each of you give this the attention that it deserves.The company is really in a terrific place right now. We have
a Cable Entertainment group that is on track to record its fifth straight year
of record earnings. A Theme Parks division that is on track to have its best year
ever. A Local Media division that will likely more than double its earnings
from a year ago ... and much more. And making it all happen are 15,000 employees
who love this company, understand what we do, and are committed to doing it
better and better every day. Thank you very much. Your strength of character,
and the strength of our operations, will ensure a strong end to this year.