Seagram Posts Loss but Does Better Than Expected

Seagram Co., whose businesses range from Universal Pictures to Absolut Vodka, reported a smaller-than-expected loss in its fiscal first quarter, aided by gains in music and at its theme parks.

The Montreal-based company had a loss of $95 million, or 22 cents a share, in the quarter ended Sept. 30.

Disappointing films such as “Mystery Men” contributed to the wider loss. That offset higher cash flow, or earnings before interest, taxes, depreciation and amortization, at Seagram’s music business. The recreation unit, which includes theme parks, and the liquor and wine unit had higher revenue and cash flow.

“Seagram did significantly better than expected,” said Jessica Reif Cohen, analyst at Merrill Lynch & Co.

Seagram shares were unchanged at $41.50 on the New York Stock Exchange.

Revenue in the quarter rose 62% to $3.64 billion from $2.25 billion, reflecting Seagram’s acquisition of music company PolyGram. On a pro-forma basis, including PolyGram in both periods, revenue increased 1.7% from $3.58 billion in the year-earlier quarter.

Pro-forma cash flow fell 13% to $352 million.

The company initially planned to release earnings Nov. 3, then decided to announce them earlier to quell speculation that its businesses may be floundering.

Revenue for the film entertainment unit, which includes Universal Pictures, rose 1.9% to $873 million in the latest quarter. The division had a cash-flow loss of $38 million, compared with pro-forma cash flow of $61 million a year earlier.

Revenue from Seagram’s recreation and other businesses rose 11% to $209 million, while cash flow rose 44% to $49 million.

Spirits and wine revenue rose 13% to $1.15 billion, while cash flow rose 8.3% to $156 million. Cash flow from continuing operations rose 16% to $156 million. Higher unit sales, especially in North America, drove the growth. Unit sales worldwide rose 11%.