‘E.T.’ Puts MCA’s Profits Into Orbit in 4th Quarter
Recording a bonanza from the release of its “E.T. the Extra-Terrestrial” videocassette in late October, entertainment goliath MCA announced a record fourth-quarter profit of $75.7 million on Thursday, more than triple the $21.8 million earned in the same period in 1987.
The latest quarter, also bolstered by successful box-office results in the Christmas movie season, enabled MCA to complete 1988 with $164.9-million net income for the year. MCA’s total 1987 profit of $137.3 million had been pulled down by problems in its toy business.
MCA declined to pinpoint its revenue or profit from “E.T.” home video sales. However, fourth-quarter revenue gave a vivid glimpse into its effect: A leap to $268.4 million in sales for home video and pay television operations from $72 million in the corresponding 1987 quarter.
Total MCA fourth-quarter revenue was $962.1 million, compared to $674.4 million a year earlier.
Besides “E.T.” cassette sales, MCA’s fourth-quarter results included big receipts from two theatrical film releases in the holiday period, “Twins” and “The Land Before Time.” These contrasted with some movie writeoffs earlier in 1988, including those on “The Milagro Beanfield War” in the first quarter and “Moon Over Parador.”
For the full year, MCA had record revenue of $3.02 billion, compared to $2.59 billion in 1987. Operating revenue for 1988 totaled a record $337.6 million, compared to $228.4 million in 1987.
Toy operations remained a drag in 1988, with an operating loss of $21.6 million, mostly on a second-quarter writedown on Gotcha! guns, which shoot paint.
However, MCA’s music entertainment and book publishing operations each had record revenue and operating income in 1988. Revenue increased for the firm’s new broadcasting and cable segment, which now includes results of WWOR-TV in the New York area and equity earnings from MCA’s 50% interest in USA Network.
The company’s share of fourth-quarter earnings of an affiliate, Cineplex Odeon Corp., were omitted from 1988 totals. MCA, which owns about 49% of the Canada-based theater operator, said that because of the normal delay in release of Cineplex earnings, there will be a one-quarter delay in MCA’s reporting of its Cineplex profit share. Previously it used estimates furnished by Cineplex.