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Seagram 2Q results lower
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February 11, 1999: 12:24 p.m. ET
Weakness at movie unit cited; profit of continuing operations beat forecast
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NEW YORK (CNNfn) - The thumbs down given many of its highly touted movies were a key factor in Seagram Co.' reduced earnings from continuing operations in its second fiscal quarter, announced Thursday.
The continuing earnings before a restructuring charge of $18 million, or 5 cents a diluted share, were below the pre-charge earnings of $58 million, or 17 cents, a year earlier.
The latest results were above the 2 cents a share consensus estimate of analysts surveyed by First Call, although the company lowered expectations in December.
Including a $405 million pretax charge related to the acquisition of PolyGram N.V., Seagram said its net loss for the quarter ended Dec. 31 was $226 million, or 62 cents a diluted share, compared with earnings of $28 million, or 8 cents, a year earlier.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, declined 19 percent to $342 million. Revenue rose 10 percent to $3.33 billion.
The movie unit's troubles came to a head late last year, when such expensive and heavily promoted films as "Babe: Pig in the City" and "Meet Joe Black" failed to generate lines at the box office. As a result, the chairmen of both the Universal Studios and the Universal Pictures units resigned.
"As expected, the performance of our motion picture group was disappointing," said Seagram (VO) president Edgar Bronfman Jr. "However, we have tackled our challenges head on."
The company was bolstered Tuesday when its co-production, "Shakespeare in Love," received 13 Academy Award nominations.
Helping to counter the movie unit was a 15 percent increase in EBITDA for the spirits and wine unit, and a 17 percent increase on a pro forma basis in the music division, which includes the newly acquired PolyGram assets. Success of the Spencer Gifts stores and the "Crash Bandicoot" video game boosted recreation and other unit EBITDA by 24 percent.
Seagram shares were up 7/16 to 49-1/8 in early Thursday trading.
Late Wednesday, Seagram announced it will retain the film assets of PolyGram after talks for a sale to Saudi Prince Muhammad Bin Bandur Abdul Aziz ended without a deal. 
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