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Canadian media companies posted solid quarterly results on Thursday, helped by robust television advertising as economic optimism solidified.
Toronto-based Corus Entertainment (CJR.B-T), which carries Oprah Winfrey's OWN cable network, said its profit more than doubled in the second quarter, while Montreal-based rival Astral Media posted more modest gains.
Corus said most of its sales growth came from specialty television advertising.
"Television momentum continues with (an) unexpected uptick in pay television subscribers," RBC Capital Markets analyst Drew McReynolds wrote in a note to clients.
Corus sells subscriptions to its Movie Central service, which includes HBO Canada, via cable and satellite companies.
The specialty television producer, which focuses on content for children and women such as Nickolodeon and the W Network, said it had 1 million pay TV subscribers soon after the quarter ended, hitting a target it had initially set to reach in 2010.
Net income was $31.6 million, or 38 cents a share, for the quarter ended Feb. 28, up from $14.6 million, or 18 cents a share, a year ago.
Consolidated revenue grew 8 percent to $191.1 million.
Analysts had expected earnings of 33 cents a share, on revenue of $190.6 million.
Advertising revenue rose 6.2 percent to $82.2 million, while subscriber fees rose 5.8 percent to $75.6 million.
ASTRAL LESS IMPRESSIVE, RAISES DIVIDEND
Astral Media (ACM.A-T), which operates television, outdoor advertising and radio business units, showed more modest gains, with profit up 3 percent helped by growth in its television segment as it benefited from improving economic conditions and cost-cutting.
Astral posted consolidated net income of $34.8 million, or 61 cents a share, up from $33.6 million, or 59 cents a share, last year.
Consolidated revenue grew 7 percent to $232.7 million, including TV revenue of $138.9 million, the company said.
Analysts, on average, had expected Astral to earn 63 cents a share on revenue of $230.6 million, according to Thomson Reuters I/B/E/S.
Astral also announced on Thursday it will raise its dividend by 50 percent to 75 cents.
Both companies—traditional middlemen between creators of content such as Hollywood studios and cable and satellite distributors—are exposed to the growing threat presented by Netflix, which offers content via the Internet.
"Video consumption is not a zero-sum game," Corus Chief Executive John Cassaday told analysts on a conference call in response to a question about the threat. "We believe there is virtually an insatiable appetite for consumers to consume more media on a multitude of platforms."
Astral told analysts it had requested Canada's broadcast regulator to study Netflix's model in light of rules to protect Canadian cultural content.
Netflix launched a movie and television streaming service in Canada in September.