TV, Music Units Boost Seagram to Small Profit

Seagram Co. squeezed out an unexpected fiscal fourth-quarter profit as strong results from its television and music businesses offset lower liquor sales in Asia, sending its shares up 11%.

The company, which produces entertainment through Universal Studios and makes Chivas Regal Scotch and other spirits, reported a profit before a gain of $3 million, or 1 cent a share. It was expected to report a loss of 1 cent a share, according to analysts surveyed by First Call Corp.

Separately, News Corp., on the strength of profitable films such as “Titanic” and “The Full Monty” as well as its global TV operations, reported that its operating revenue was up 15% to $12.8 billion, with operating profit up 21% to $1.2 billion for the year ended June 30. Fox Filmed Entertainment’s profit was $254 million, up 140% from the previous year.

Although Seagram’s profit before a gain was still below the $48 million, or 13 cents a share, it earned a year ago, many investors feared that the lingering Asian economic crisis and a lack of hit movies from its Hollywood studio would cripple earnings for the quarter ended June 30.

Seagram’s stock rose $3.44, or 11%, to close at $34.69 on New York Stock Exchange trading of 2.56 million shares, more than three times the three-month daily average.

Much of the quarter’s improvement stemmed from the company’s decision last year to sell its Universal television production business and its USA Network and Sci-Fi cable channels to Barry Diller’s Home Shopping Network for $4.5 billion.

As part of that agreement, Seagram received a 45% stake in Diller’s renamed USA Networks Inc., which contributed $60 million in cash flow to Seagram.

Meanwhile, Universal Music reported a 30% rise in cash flow, and the company’s theme parks generated a 35% increase.

One major disappointment for the company was its film business. Revenue for the filmed entertainment group, excluding USA Networks, fell 49% to $402 million, from $785 million.

Last year, Universal distributed blockbusters such as Steven Spielberg’s “Lost World: Jurassic Park” and Jim Carrey’s “Liar Liar.”

Now, Universal ranks next to last among major Hollywood studios in market share with 4.6%, ahead of only struggling MGM Inc., at 3.4%.

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Bloomberg News was used in compiling this report.