NBC U has missed its targets for two consecutive quarters. How much slack will Jeff Immelt cut Jeff Zucker? A bit more, it seems: GE is now predicting very modest goals for Q3. But if Zucker can’t nail those….
GE says it expects to see flat to 5% profit growth for NBC U in Q3. This, in a quarter with the Beijing Olympics (contributing $1 billion in ad revenue) and a loaded film slate. It had previously insisted that NBC U would see its bottom line grow by 5% or more for the past two quarters, and came up short both times.
No explanation from GE on why Q3 is looking so weak; presumably it has to do with a crappy U.S. ad market. But is the ad market that much worse than it was three months ago? Or is Immelt just trying to set the bar low enough so that Zucker can stumble over it — and then try to pawn the unit off on to some other sucker?
Some colour from GE’s earnings call on NBC U’s various business units:
- Network TV ratings down 10%, costs also down, and upfront advertising sales came in at $4.3 billion, up from $4 billion last year.
- Local TV revenue down 2%, but thanks to cost cuts, profits flat
- Cable TV ratings up 52% in the quarter, upfront ad sales up 25%, and profit up 13%
- Olympics advertising revenue expected at $850 million for the network, $150 million for local stations
- Theme park attendance down 2% in Orlando, 11% in Los Angeles
See Also: GE Earnings: NBC Misses Another Quarter