TORONTO - CanWest Global Communications Corp reported a softer third-quarter profit on Wednesday and said it expects to decide this fall on spinning off some or all of its Canadian assets as an income trust.
Canada's No. 1 media group -- a major shareholder in New Zealand's CanWest MediaWorks, which
owns TV3 as well as a group of national radio stations -- said net income slipped to $C53 million ($64.89 million), or 30 Canadian cents per share, in the quarter ended May 31, from $C54 million, or 31 Canadian cents per share, in the corresponding period a year earlier.
Earnings from continuing operations were 33 Canadian cents per share.
Analysts had expected a profit of 28.5 Canadian cents per share before exceptional items, according to Reuters Estimates.
"They seem to be pretty much in line actually with what we were looking for ... a lot of the divisions had reported so it was really just the Canadian television and newspaper (arm). I would say the newspaper had a pleasant upside surprise," said one Toronto-based media analyst.
CanWest's subordinate voting stock was up 10 Canadian cents, or 0.75 per cent, at $C13.45 in Toronto on volume of more than 2.3 million after the results.
"It's obviously on very strong volume. I think maybe people have been hanging back (ahead of earnings)," the analyst said.
Revenues at the broadcaster and newspaper publisher rose to $C810 million from $C784 million.
CanWest said the possible spinout of some or all of its Canadian media assets into an income trust structure "remains under close and active consideration".
"The company expects to take such a decision this fall," the statement said.
CanWest had warned in June that the departure of senior executive Richard Camilleri could delay the decision on spinning off its newspaper operations.
The analyst said the latest news was not surprising given the comments in June.
The prospects of spinning off Canwest's newspaper assets as an income trust has helped to support its share price.
Income trusts are designed to minimize corporate tax by distributing cash flow to their investors, who are taxed on the payouts they receive. As a result, businesses structured as trusts typically trade at a higher valuation.
The popularity of the structure with yield-hungry Canadian investors has spurred the conversion of a range of companies, from movie theatre chains to seafood packers.
- REUTERS
TORONTO - CanWest Global Communications Corp reported a softer third-quarter profit on Wednesday and said it expects to decide this fall on spinning off some or all of its Canadian assets as an income trust.
Canada's No. 1 media group -- a major shareholder in New Zealand's CanWest MediaWorks, which
AdvertisementAdvertise with NZME.