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NBC Universal's Q3 Profits Up 13%

Vivendi Postpones Decision On NBCU

Comcast/GE Discussing Joint NBC Universal Venture

NBC Universal recorded a 13% increase in profit in the third quarter to $732 million, thanks to a gain related to the company's investment in A&E Television Networks which has merged Lifetime into the fold. Revenue fell by 20% in the same period.

The company did, however, have some write-downs. Indian broadcaster NDTV is buying back NBCUs stake in the venture and the entertainment giant also recorded an impairment charge related to its Weather Channel investment. After tax, General Electric said NBCU recorded a gain of $89 million because of the changes in the quarter.

For the first nine months of the year, profit at NBCU was down 27%, to $1.66 billion from $2.2 billion in 2008. Last year, NBC aired the Beijing Olympics and its news networks had the benefit of political dollars and more viewers.

Revenue was off 20% in the third quarter, at $4 billion, down from $5 billion in the year-ago period. For the first nine months of 2009, revenue was off 11%, at $11.1 billion, according to a press statement from GE. GE's total net earnings were $2.5 billion for the third quarter, down 44%.

Keith Sherin, GE's vice chairman and CFO, said that without the Olympics comparison, revenue at NBCU would have been flat; however, profit would have been down 9% without the gain attributable to the company's stake in a bigger A&E Television Networks.

Cable contributed $1.2 billion revenue in the quarter, up 8%, or $552 million in profit up 11%. At the broadcast unit, revenue was flat at $1.4 billion, while profit was up 4%.

Sherin described a strong scatter market for both the NBC network, which was seeing double-digit increases, and the cable networks, which include USA, Syfy and Bravo, which were up 20%.

"It shows signs of life," Sherin said of the ad market. He added that The Jay Leno Show and the late-night shuffle of Conan O'Brien and Jimmy Fallon had exceeded expectations.

GE executives touched on plans to create a new venture in partnership with Comcast. Under discussion is a plan to create a new company that would include Comcast's cable programming assets and NBCU, which GE plans to contribute. That deal depends on the co-operation of another owner of NBC Universal, Vivendi.

Responding to an analyst's question about how GE's portfolio mix might change, GE CEO Jeff Immelt said, "The company's got a lot of cash; we're in great shape overall. NBCU is a great franchise. It has consistently delivered income growth and cash through the recession, so it's a solid performer. We've always evaluated our portfolio. We expect this to be a reset world, and it's a good time to talk about portfolio.

"Vivendi has been a great partner and they have a window every year," Immelt continued. "This year we wanted to be ready for several scenarios. We are ready for an IPO or a strategic partnership like the one we have with Vivendi. We don't have a specific announcement. We plan to run NBC Universal over the long term or partner if that accelerates the growth of the franchise."