Canada's Corus Entertainment forecasts Q4 TV ad revenue to fall 20%; shares down 9%

Overview

• Corus fiscal Q3 revenue falls 10% yr/yr, missing analyst expectations, per LSEG data

• Adjusted net income beat analyst estimates, loss per share smaller than expected, per LSEG data

• Company focuses on cost reduction and strong programming lineup for growth

• Expects Q4 TV ad revenue to decline 20%

• Shares down 9.1% to C$0.10, on track for worst day since Feb. 28

Outlook

• Year-over-year percentage decline in television advertising revenue in Q4 is expected to be in the 20% range

• Corus anticipates flat amortization of TV program rights in Q4

• Company plans cost reductions, expecting admin expenses to drop 10-15%

• Corus sees ongoing industry headwinds affecting linear advertising demand

Result Drivers

• TELEVISION ADVERTISING - Revenue fell 15% due to challenging industry landscape despite strong audience performance, per CEO John Gossling

• COST REDUCTION - Company focused on reducing costs and improving efficiencies through right-sizing initiatives

• PROGRAMMING LINEUP - Secured new shows and returning hits for upcoming broadcast season to drive growth

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "sell" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the broadcasting peer group is "hold."

• Wall Street's median 12-month price target for Corus Entertainment Inc is C$0.08, about 46.7% below its last closing price of C$0.11

Press Release: ID:nCNWbfq6la