Seagram Posts $7-Million Loss Before Gains; Cites Asian Flu

Seagram Co. reported a fiscal third-quarter loss that was in line with expectations, as economic turmoil in Asia cut liquor sales in the region.

The entertainment and beverages company, which makes Chivas Regal whiskey and Tropicana juices, said its loss before gains was $7 million, or 2 cents a diluted share, compared with net income of $27 million, or 7 cents, a year earlier. The company’s Universal Studios Inc. entertainment business, especially its 45% stake in Barry Diller’s USA Networks television business, helped offset Asian woes.

In the latest quarter, a gain of $187 million, or 54 cents a share, from the sale of USA Networks, and a gain of $281 million, or 80 cents a share, from the sale of 15 million Time Warner Inc. shares, resulted in net income of $461 million, or $1.32 a share.

Seagram’s weak liquor results come as it considers buying music companies EMI or PolyGram. Some investors have called on Chief Executive Edgar Bronfman Jr. to split the company into separate drinks and entertainment businesses to boost the share price.

Entertainment profits rose 31% to $149 million from $114 million, with the majority of the increase coming from its USA Networks interest, Seagram told analysts. The TV business helped overcome a string of box-office disappointments including “Blues Brothers 2000.”

“We’ve had a lousy year in the film business,” Bronfman acknowledged.

Seagram warned in its conference call that the weakness in Asia will persist in the fourth quarter and next year.

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News Corp. said its fiscal third-quarter profit rose a better-than-expected 10%, led by its box-office hit “Titanic” and higher advertising revenue at its TV stations and Fox TV network.

Profit from operations before charges and gains rose to $319 million, or 32 cents per ADR, from $291 million, or 33 cents, in the year-ago period.