Seagram 4th-Quarter Loss Smaller Than Expected

Seagram Co., which transformed itself from a liquor maker into one of the world’s entertainment giants, lost less money than expected in its fiscal fourth quarter as its movie studio finally began to release some hits.

The loss from operations for the owner of Universal Studios widened to $129 million, or 32 cents a share, from $12 million, or 3 cents, a year earlier. Seagram’s loss was smaller than the 42-cent average estimate of analysts surveyed by First Call Corp.

Expensive earlier flops continue to weigh on Seagram’s film business, though recent hits, including “Notting Hill” and “The Mummy,” helped to temper losses. Still, Seagram Chief Executive Edgar Bronfman Jr. said the studio won’t be profitable for several more quarters. Seagram’s music business, the world’s largest, and liquor unit both generated higher cash flow.

Revenue rose 68%, to $3.5 billion from $2.1 billion, reflecting Seagram’s acquisition of music company PolyGram.

Cash flow--or earnings before interest, taxes, depreciation and amortization--rose 53% to $259 million for the quarter ended June 30, up from $169 million a year earlier. On a pro forma basis, cash flow increased 17%.

Many analysts use cash flow to evaluate Seagram’s performance because it focuses on the underlying businesses and excludes interest payments and noncash charges such as amortization of goodwill. Pro forma figures are adjusted to reflect the PolyGram purchase and the sale of its Tropicana beverage unit.

Seagram has been investing in new businesses that it hopes will drive future growth, including overseas pay TV channels, digitizing its music catalog and selling music through digital downloading on the Internet.

Shares of Montreal-based Seagram rose $3.50 to close at $53.63 on the New York Stock Exchange.