Crown Media 4Q profit falls 71 percent after hefty contract termination costs

Crown Media 4Q profit falls 71 pct on higher costs

STUDIO CITY, Calif. — Crown Media Holdings Inc., which operates the Hallmark cable channels, on Thursday reported a 71 percent drop in its fourth-quarter profit after accounting for contract termination costs.

The company incurred $4.7 million in expenses to end two agreements over carrying the Hallmark Channel in high definition. Those costs more than offset a boost in revenue as fees rose and advertising revenue rebounded slightly with higher pricing.

In the quarter, Crown Media earned $373,000, or less than a penny per share, compared with a profit of $1.3 million, or 1 cent per share, in the prior year’s quarter.

Revenue rose to $77.6 million from $75.2 million, as Hallmark gained more subscribers and its programming fees rose.

Cable channels typically charge cable, satellite TV and phone companies that offer video a programming fee per subscriber for the right to carry the channel. Programming fee revenue is dependent on rate hikes and an increase in the number of subscribers.

For the year, Crown Media lost $22.6 million, or 22 cents per share, compared with a loss of $37.2 million, or 36 cents per share. Revenue fell to $279.6 million from $281.8 million.

No analyst estimates were available from Thomson Reuters for Crown.

Shares of Crown Media, based in Studio City, Calif., rose 5 cents to $1.72 in morning trading.