I've called Canadian content provider Corus Entertainment Inc. (TSX:CJR.B) a value play for some time now, and the company's stock price continues to fall, for good reason. The company operates in an industry which is in sector-wide decline, and expectations are that the primary distribution channel utilized by Corus will be out of fashion in the medium-term (we're not talking decades anymore).
No wonder why the company's share price continues to take a beating. I mean, I'm not bullish on the long-term outlook for cable companies in general, and for those who are unwilling to adapt, unfortunately, the circle of capitalism will rear its ugly head.
That being said, companies like Corus have found ways to slow revenue declines and boost profits - tightening one's belt, it seems, is the way to go, while looking for ways to maximize on the value of the original content the company produces.
Whether switching distribution platforms is on the table as a long-term strategy for the firm or not, revenue declines from the company's advertising and television businesses fell marginally, with costs relating to restructuring declining substantially this past quarter, meaning Corus may have more life than many suggest in this current environment.
Corus certainly has a long way to go to guarantee its future, but earning $0.16 per share compared to analyst estimates of $0.15 per share is certainly not a bad thing for the struggling firm.
Invest wisely, my friends.
