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CBS Reports Q2 Revenue Up 31%
CBS Corp. reported results for the second quarter ended June 30. CBS Television Stations revenue increased 31% to $337.9 million from $257.9 million due to the improved advertising marketplace across many key categories, including automotive and financial services, and higher political advertising sales.
The company also realized a 17% increase in local broadcasting revenue (TV stations plus CBS Radio) to $678.2 million from $579.5 million in the year-ago quarter.
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The company as a whole posted revenue of $3.33 billion, up 11% from $3.01 billion for the same quarter last year, reflecting growth at all of the company's segments. In addition to segment leader local broadcasting there were also gains of 12% at Cable Networks and 10% at Entertainment. Compared to the same quarter last year, total advertising sales were up 9%, content licensing and distribution revenues were up 19% and affiliate and subscription fees
were up 12%.
"CBS turned in terrific results in the second quarter of 2010," said Sumner Redstone, executive chairman, CBS Corp. "We remain focused on all the things that matter most — growing our businesses, enhancing our financial strength and broadening the reach of our industry-leading content — and I have never been more confident in our company's prospects."
"For the second consecutive quarter, CBS delivered double-digit year-over-year revenue and profit growth, significant margin expansion and higher free cash flow," said Leslie Moonves, president-CEO. "With top-line gains in all of our businesses, and a continued vigilance on cost containment, revenues are translating more efficiently into profits. Meanwhile, our content is thriving: The network finished another television season in first place, which helped us sell next year's schedule in a very strong Upfront marketplace at attractive rates. And during the quarter we extended our sports programming deal with the NCAA in a truly beneficial way. At the same time, our large-market presence and dramatically improved cost structure make CBS a leading beneficiary of the rebounding local advertising marketplace.
"Looking to the second half of 2010," Moonves continued, "all signs point to ongoing growth and profitability. The very healthy ad sales pacing we're seeing today indicates that the recovery is continuing, and we expect a significant lift in political advertising around the November elections. Going forward, we see continued and sustainable benefits from growth in retransmission consent fees, expanded international distribution of our content and the vastly improved economics of our NCAA deal, for many years to come. All the while, we'll keep evolving our business model to meet the increasing demand for top-quality content on all of the leading emerging platforms, which represents a huge opportunity for CBS."
Sinclair 2Q Revenue Up 19%
Sinclair Broadcast Group reported that its net broadcast revenues from continuing operations were $158.7 million for the three months ended June 30, an increase of 19.3% versus the prior year period result of $133.0 million. The company had operating income of $56.7 million in the quarter, as compared to $25.8 million in the prior year period. The company had net income of $17.3 million versus $2.8 million in the prior year period.
Local net broadcast revenues, which include local time sales, retransmission revenues and other broadcast revenues, were up 16.6% in the second quarter 2010 while national net broadcast revenues, which include national time sales and other national broadcast revenues, were up 27.7% versus the second quarter 2009.
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Excluding political revenues, local net broadcast revenues were up 16.3% and national net broadcast revenues were up 19.7% in the second quarter.
Political revenues were $3.8 million in the second quarter 2010 versus $0.7 million in second quarter 2009.
Among the many advertising spending categories that were up in the quarter were schools, media, medical and furniture, while paid programming, fast food and religious ad spending were down the most.
Automotive, the company's largest category, was up 46.2%, while services, its second largest category, was up 9.1% in the quarter.
"Broadcast television advertising continues to grow, an indicator that the economy is showing signs of recovery," commented David Smith, Sinclair president-CEO. "In the second quarter, we experienced gains in nearly all of our major core advertising categories, with the largest growth coming from the automotive sector, which was up 46% year-over-year. Political for the first six months also paced ahead of the same period in 2006, the last non-presidential election year. The more important data points, however, are that the third quarter's core advertising sales are on pace to not only exceed the same period in 2008 by approximately 9% growth, but also to approximate the current year's second quarter core business, which is typically one of our stronger quarters in any given year."
Cablevision Reports Improved Q2
Cablevision Systems Corporation reported financial results for the second quarter ended June 30, 2010.
Second quarter consolidated net revenues grew 5.8% to $1.802 billion compared to the prior year period, reflecting solid revenue growth in Telecommunications Services and Rainbow, offset slightly by a decline at Newsday. Consolidated adjusted operating cash flow (“AOCF”)1 grew 9.0% to $677.6 million and consolidated operating income grew 23.0% to $416.8 million, both compared to the prior year period. Second quarter 2010 AOCF and operating income were favorably impacted by a $23 million programming cost adjustment related to prior years. If excluded, AOCF and operating income would have grown 5.3% and 16.2%, respectively, compared to the prior year period.
Cablevision President and CEO James L. Dolan commented: "For the second quarter, Cablevision delivered solid increases in revenue and AOCF, driven primarily by the ongoing strength of our core businesses. Both Cable and Rainbow performed well over the last three months fueled, in part, by impressive double-digit increases in advertising revenue. In addition, our cable business continues to experience steady growth across all of our consumer services, including basic video, which helped maintain Cablevision’s industry-leading penetration rates again this quarter. We are pleased with our 2010 year-to-date results, highlighted by free cash flow of $432 million,” concluded Mr. Dolan
DIRECTV Q2 Up
DIRECTV reported an increase in second quarter 2010 revenues of 12% to $5.85 billion, operating profit before depreciation and amortization1 (OPBDA) of 18% to $1.64 billion and operating profit of 44% to $1.01 billion compared with last year’s second quarter. DIRECTV reported that second quarter net income increased 33% to $543 million and diluted earnings per share, excluding the $0.18 per share impact from the Malone transaction, grew 50% to $0.60 compared with the same period last year.
“Building on our first quarter momentum, DIRECTV delivered yet another excellent quarter highlighted by solid double-digit revenue growth, significant margin expansion and record-setting subscriber growth in Latin America,” said Mike White, president and CEO of DIRECTV. “Our industry leading revenue and earnings growth continues to be driven by the strength of our brand, an unparalleled set of compelling video products and services, and an intense focus on achieving operational excellence through increased productivity and operating efficiencies in both our U.S. and Latin American businesses.”
White added, “In addition to our solid financial results, the second quarter was also marked by several other achievements including the introduction of two important new services—Whole Home DVR and a suite of three dedicated 3D channels—while also delivering the most comprehensive FIFA World Cup coverage across the Americas. Also in the quarter, we repurchased $1.72 billion of our stock bringing year-to-date repurchases to nearly $2.2 billion. Finally, we completed the simplification of our ownership structure by eliminating the dual class stock of DIRECTV, and now for the first time, DIRECTV is a truly independent company.”
News Corp Q4 Revenue Up 6%
News Corporation reported full year total segment operating income1 of $4.0 billion, a $401 million or an 11% increase from the $3.6 billion reported a year ago. Excluding the one-time $500 million litigation charge from the current year and considering the absence of the $121 million earnings contributions from NDS Group plc (“NDS”), which was not consolidated in fiscal 2010, total segment operating income growth was 30%. Current year revenues of $32.8 billion increased 8% from the $30.4 billion reported in fiscal 2009. The higher full year total segment operating income was the result of double digit growth at the majority of the Company’s business segments, partially offset by lower contributions from the Direct Broadcast Satellite Television and Other segments.
“So as we turn to Fiscal 2011 and beyond, I am confident in our businesses and in our people to deliver superior results.”
The Company reported net income for the full year of $2.5 billion ($0.97 per share) as compared to a net loss of $3.4 billion ($1.29 per share) reported in fiscal 2009. The full year results primarily reflect the increased total segment operating income results noted above as well as improved equity earnings of affiliates. Additionally, the prior year results included $9.2 billion in pre-tax impairment and other charges partially offset by a non-cash tax benefit of $1.1 billion from the resolution of various tax matters and a net gain of $1.2 billion on the partial sale of the Company’s interest in NDS.
For the fourth quarter, the Company reported total segment operating income of $932 million, compared with $948 million reported a year ago. This slight decline was primarily driven by increased contributions from the Cable Network Programming, Television and Newspapers and Information Services segments, which were more than offset by lower contributions from the remaining business segments.
The Company reported fourth quarter net income of $875 million ($0.33 per share) as compared to a net loss of $203 million ($0.08 per share) reported in the fourth quarter a year ago. Fourth quarter results include a gain on the sale of the Company’s Bulgarian TV station, the Company’s share of a favorable British Sky Broadcasting Group plc (“BSkyB”) litigation settlement and a non-cash tax benefit related to the recognition of certain prior year tax credits. The positive impact from these items was partially offset by an impairment and restructuring charge of $217 million related to the Company’s international outdoor and mobile businesses. The fourth quarter a year ago included $680 million in impairment and restructuring charges.
Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said:
“I am very pleased with the overall 30% increase, which is more than three times the growth we were projecting when we started the fiscal year.
“Despite the volatility of world economies, News Corporation continues to thrive on a truly global scale. Having the biggest worldwide movie in history helped us achieve these Fiscal 2010 results, but that was just a part of a much broader improvement at News Corporation. These results underscore just how well positioned we are – fiscally, operationally and strategically – for further growth across all of our markets. The opportunity for us to expand the scale of our franchises is significant, including through taking advantage of the continual technological advances that will broaden the reach of our core content and distribution businesses.
“So as we turn to Fiscal 2011 and beyond, I am confident in our businesses and in our people to deliver superior results.”
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Chyron Revenue Up 20%; Losses Rem
Chyron announced its financial results for the second quarter and six months ended June 30, 2010.
Second Quarter 2010 Year-Over-Year Financial Highlights:
Revenues of $6.94 million were up 20%;
Gross profit margin improved to 70% compared to 69%;
Operating loss narrowed 52% to $0.68 million;
Net loss narrowed 35% to $0.71 million;
Loss per share, basic and diluted, reduced to $0.04 per share, a $0.03 per share improvement; and
Earnings before interest, taxes, depreciation and amortization ("EBITDA") plus non-cash share-based compensation expense ("Adjusted EBITDA") significantly improved to $0.06 million. An explanation of management's use of this measure of results and a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure of net income (loss) is set forth at the end of this press release.
Michael Wellesley-Wesley, Chyron President and CEO, commented, "Chyron's recovery from the recessionary levels in 2009 strengthened even further in the second quarter with business metrics improving across the board. This was most evident in revenue, which has been steadily building momentum during the first half. Revenues were up 20% in the second quarter and 10% in the first quarter when compared to the respective periods last year.
"If the economy continues to improve, we anticipate that our revenues will continue to improve in the second half of the year over the prior year periods; however, our focus will remain on cost containment and cash generation. The budgets of our worldwide media customers are impacted by economic ups and downs, and though we have seen improvement in our markets, we believe that a guarded outlook for the short-term is prudent given the fragile and patchy nature of this recovery.
"When looking at Chyron's medium-term prospects into 2011, we are more optimistic. We believe that the technology enhancements that we put into place in 2009 and 2010 has made Chyron a stronger company with a clear means to drive future growth. We believe that Chyron is well-positioned to gain market share in its core broadcast market and able to penetrate new media verticals with AXIS Graphics, a unique cloud service content creation software solution. Our recent focus has been on building a world class sales and marketing infrastructure. We have successfully recruited senior sales and marketing executives with proven track records and extensive experience across the media/technology space. Bonnie Barclay has joined us as Chief Marketing Officer, Susan Brazer has joined as Chief Commercial Officer and Paul Glasgow will head our European sales effort. We plan to selectively add incremental sales resources as needed in the second half of 2010."
Mr. Wellesley-Wesley concluded, "If the economy continues to improve, we expect to generate a strong return from these investments in 2011 and 2012. With product development ahead of schedule and our business on track, all that remains now is to execute our aggressive revenue growth strategy."
For the second quarter of 2010, total revenues were $6.94 million, an increase of 20% over revenues of $5.78 million for the second quarter of 2009.
Service revenues, which include revenues from the Company's AXIS online graphics service, as well as maintenance agreements, training and creative services, were $1.53 million for the quarter, a 29% increase over service revenues of $1.19 million for the prior year's second quarter. Service revenues as a percentage of total revenues increased to 22% from 21% in the prior year's second quarter. Product revenues were $5.40 million for the second quarter, an 18% increase year-over-year.
Gross profit margin was 70% and 69% for the second quarters of 2010 and 2009, respectively. Operating loss in the second quarter of 2010 narrowed significantly to $0.68 million, a 52% improvement over the operating loss of $1.43 million for the prior year's second quarter. The decrease in operating loss is primarily the result of increased revenues and gross profit margin, and slowing growth in operating expenses. For the second quarter 2010, operating expenses were $5.50 million, an increase of 2% over the $5.41 million in operating expenses for the comparable prior year quarter.
Net loss for the second quarter of 2010 was $0.71 million, a 35% improvement over the $1.09 million net loss reported for second quarter of 2009.
For the six months ended June 30, 2010, total revenues were $13.81 million, an increase of $1.76 million, or 15% over the comparable prior year period.
Service revenues were $3.05 million, up $0.72 million or 31% over the prior year period. Product revenues increased $1.03 million to $10.76 million, or 11%, year-over-year. Service revenues increased to 22% of total revenues from 19% of total revenues compared to the same period last year.
Gross profit margin increased to 70% from 68% in the year earlier period. Operating expenses of $10.79 million for the first six months of 2010 increased slightly from the $10.70 million reported for the prior year period. While for the first six months of 2010 there was an operating loss of $1.14 million, this represents a $1.36 million or 54% improvement over the $2.50 million operating loss reported for the first six months of 2009.
Net loss for the first six months of 2010 was $1.37 million, a $0.60 million or 30% improvement over the $1.97 million net loss for the first six months of 2009.
Harris Reports Strong Q4
Harris Corporation reported GAAP income from continuing operations for the fourth quarter of fiscal 2010 of $151 million, or $1.16 per diluted share, compared with a loss of $84 million, or $.63 per diluted share, in the prior-year quarter. Non-GAAP income from continuing operations in the fourth quarter of fiscal 2010 was $161 million, or $1.24 per diluted share, compared with $120 million, or $.90 per diluted share, in the prior-year quarter. Non-GAAP income excludes acquisition-related costs in both quarters as well as pre-tax charges of $256 million for a non-cash impairment of goodwill and intangible assets in the Broadcast Communications segment in the prior-year fourth quarter. Revenue for the fourth quarter of fiscal 2010 was $1.46 billion, compared with $1.29 billion for the fourth quarter of fiscal 2009. Orders in the fourth quarter were $1.72 billion, compared with $1.29 billion in the prior-year quarter. A reconciliation of GAAP to non-GAAP financial measures is provided in Tables 5 through 8, along with the accompanying notes.
"Harris achieved another quarter of strong results with orders, revenue and income all significantly higher than in the prior year, driven primarily by continuing strong demand and excellent operating performance in RF Communications," said Howard L. Lance, chairman, president and chief executive officer. Harris fourth quarter orders were significantly higher than revenue, thus adding to an already strong backlog as we enter fiscal 2011. In Tactical Radio Communications, backlog increased to a record $1.24 billion driven by strength in both U.S. and international markets.
"As previously announced, Harris completed the acquisition of CapRock Communications, a global provider of mission-critical managed satellite communications solutions for the government, energy and maritime markets. With this acquisition we further increased the breadth of our assured communications® capabilities, entered new vertical markets, and increased our international presence." The acquisition is expected to be slightly accretive to Harris earnings in fiscal 2011, excluding acquisition-related costs, and a more significant contributor to earnings in fiscal 2012.
Miranda Reports Strong Q2
Miranda Technologies reported results for the second quarter ended June 30, 2010.
Second quarter revenues were $32.1 million, or 3% higher than last year and 11% better than the first quarter of 2010. Excluding the impact of foreign exchange, sales were up 18% over 2009, driven by stronger sales in both the United States and International markets. Gross margins came in at 60% of sales, the highest level seen in recent quarters. Net income grew by 173% over 2009 to $3.5 million or 15 cents per share. Compared to Q2 2009, operating expenses for the quarter were positively impacted by foreign exchange gains and higher research and development tax credits. Cash levels continue to be strong with cash, cash equivalents and temporary investments totalling $50.8 million at quarter end. During the quarter, the Company began purchasing shares for cancellation under its normal course issuer bid (NCIB) and an automatic securities purchase plan was also launched in connection with the program. The current NCIB was originally announced in August 2009.
"Quarterly sales momentum continues to build, with order intake levels strengthening significantly over the first quarter of 2010," commented Strath Goodship, Miranda's President and Chief Executive Officer. This includes a noticeable uptick in the USA, where broadcast markets have been particularly hard hit by the economic downturn. "At the same time we are seeing heightened sales of higher-margin products, including routers, which positively impacts customer and product mix, along with gross margins."
Some of the notable sales wins in recent months include Discovery (Singapore), ERTU (Egypt), HBO (US), KBS (Korea), Korea Telecom, MTV (Hungary), NBC Connecticut, Sky Italia (Italy), Televisa (Mexico), Tianjin TV (China) and Verizon (US). Several orders were also completed in connection with the 2010 Soccer World Cup, including those to Globosat (Brazil), Rede Bandeirantes (Brazil) and Televisa (Mexico).
"We are taking a number of steps to build on our momentum while our market rapidly evolves, including the hiring of Kevin Joyce in the newly created position of Chief Sales and Marketing Officer," added Mr. Goodship. Mr. Joyce has a track record of success most recently with Eastman Kodak where he was Vice President, Worldwide Sales and Marketing of the $1.2 billion Digital Printing Solutions Group. The accelerating demand for higher quality, over more outlets at a lower operating cost, something that started impacting the print industry several years ago, is beginning to take hold in television. Mr. Joyce's experience should help the Company capitalize on these changes.
"Looking to the second half of 2010, we expect overall business conditions in each of our markets to strengthen, in conjunction with a gradually improving global economy," commented Mr. Goodship. "We remain focused on capitalizing on improving markets by offering best-in- class solutions with compelling value, while at the same time targeting acquisition opportunities. This, combined with a solid balance sheet, should place us in a strong position to grow the business and drive profitable growth. We look forward to a gradual return to improved spending by broadcasters."
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SCRI RESEARCH NEWS
2010-2011 Broadcast/Pro Video Macro Industry Overview Report:
88 page report of analysis and information on the state-of-the-industry compiled from secondary online research sources including industry news sites, manufacturers sites, as well as SCRI's own weekly online News Briefs and Insider Reports.
2010-2011 Broadcast/Pro Video Micro Quantitative Product Data Report: 30-page report containing quantitative data tables, for all six verical end-user markets, as well as in total, plus a 6 page summary analysis of the quantitative data tables
2010 - 2011 Broadcast/Pro Video Product Reports (25):
Video Camcorders; ;Video Cameras; Camera Mounting Systems; Character Generators; Clip / Still Stores; Composite/Component Encoders; Digital Effects Processors; Graphics & Effects Software; Graphics & Effects Workstations; Master Control Switchers; Non-Linear Editing Systems; Production/Post Switchers; RAID Video Storage; Routing Switchers; Standards / Formats Convertors; TBC's / Frame Synchronizers; Telecine Equipment; Terminal Equipment; Up/Down Converters; Video Compression Encoders; Video Disk Recorders; Video Monitors; Video Servers; Video Test & Measurement; VTRs
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