Dearth of DVDs, Mixed Box Office Downsize Universal Q2 Results17 Jul, 2009 By: Erik Gruenwedel
A reduction in new DVD and Blu-ray releases coupled with mixed box office results contributed to NBC Universal posting second quarter (ended June 30) operating income of $539 million, down 41% from $909 million during the previous-year period.
For the quarter, NBC Universal, which includes Universal Studios and Universal Studios Home Entertainment and is a unit of General Electric, saw an 8% segmental revenue decline to $3.5 billion from $3.8 billion last year.
Keith Sherin, GE CFO, in an investor call, said the company incurred $8 million in restructuring costs at NBC Universal related to personnel changes. He said studio box office performance was mixed, characterizing Fast & Furious a success with more than $155 million in ticket sales and Land of the Lost a disappointment with ticket sales of $48.1 million through July 12.
Fast & Furious streets on Blu-ray and DVD Sept. 3.
Sherin said a lack of new release DVD and Blu-ray releases in quarter contributed to an $80 million studio revenue decline. He said online repurposed TV streaming site Hulu ended the quarter the No. 2 video site behind YouTube.
Jeff Immelt, chairman and CEO of GE, said there continued to be "crossover headwinds" at NBC Universal due to the ongoing recession underscored by weak local TV advertising markets. The executive said he expects earnings to be flat through the fiscal year despite a "significantly better" revenue forecast in the second half. He said NBC Universal incurred a $200 million impairment loss, in addition to a $150 million loss due to no Olympics.
Overall, GE second quarter net income fell 47% to $2.9 billion on revenues of $39.1 billion, which was down 17% from $46.8 billion last year.