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Seagram 1Q diluted
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November 4, 1998: 8:25 a.m. ET
Beverage and media firm posts drop in revenue and profit, but beats Street
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NEW YORK (CNNfn) - Seagram Co. Ltd. reported across-the-board declines in first-quarter financial results Wednesday, but still beat out Wall Street estimates by a penny.
The Canadian beverage and entertainment company posted net income of $1.16 billion, or $3.35 per share, for the three months ended Sept. 30, compared with $133 million, or 37 cents a share, a year ago.
The most recent quarter, however, includes a gain of $1.07 billion, or $3.09 per share, on the sale of the Tropicana juice business to PepsiCo on Aug 25.
Excluding that gain and the results from discontinued operations, Seagram's operating income dipped to 27 cents per share, down from 32 cents a share in the year-ago quarter.
Analysts expected the company to earn 26 cents a share, according to First Call estimates.
During the quarter, Seagram revenue totaled $2.2 billion, down from year-ago sales of $2.4 billion.
"There were few surprises in the quarter," President and Chief Executive Edgar Bronfman, Jr. said. "We were pleased with Universal Music Group's strong EBITDA gain, as we were with PolyGram's third-quarter music results announced on Oct. 21. We initiated our tender offer for PolyGram today and expect to complete the acquisition in early December. We look forward to combining the two music companies and we remain confident about our future performance."
The drop in earnings before interest, taxes, depreciation and amortization (EBITDA) in the Seagram spirits and wine group, he said, "is not indicative of our expectations for the group's results for full fiscal year 1999. We presently expect to see recovery for our Spirits and Wine Group's performance over the next three quarters. In fact, we are hopeful that we will achieve modest growth in EBITDA for the full year."
Shares of Seagram (VO) finished up 3/16 at 33-3/8 Tuesday on the New York Stock Exchange.
To help finance its pending $10 billion acquisition of music label PolyGram NV, Seagram agreed last week to sell the Dutch entertainment company's film library for $250 million to Metro-Goldwyn-Mayer Inc., the studio controlled by billionaire financier Kirk Kerkorian.
Once the PolyGram acquisition is complete, Seagram will become the largest participant in the music business, with a 23 percent stake in the global market.
The company earlier agreed to sell its Tropicana Products juice division to PepsiCo Inc. to raise about $3 billion, and recently announced plans to divest its Mumm and Perrier-Jouët Champagne companies. 
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