Viacom Profit Falls on Marketing Costs, Restructuring at MTV
Viacom's earnings fell 36% in the first quarter, weighed down by higher marketing expenses for movies and a restructuring charge at its MTV group, the media company reported.
Viacom , which also owns Paramount Pictures, DreamWorks and cable networks VH1 and BET, earned $202.9 million, or 29 cents a share. in the three months ending March 31, down from $317.2 million, or 43 cents a share, a year earlier.
Excluding the after-tax cost of $35 million for the charges at MTV, the per-share earnings were equivalent to 34 cents, ahead of the 32 cents that analysts were expecting, according to Thomson Financial.
Revenues grew 16% to $2.75 billion from $2.37 billion.
Operating income fell 29% to $442.8 million from $623.5 million a year ago, weighed down by the restructuring charge at MTV Networks, and an increase of $170 million in advertising costs in the United States at Viacom's movie division.
MTV Networks said in February that it was cutting 250 jobs, or about 6% of its work force, in an effort to cut costs and build up its businesses online and in new networks. In addition to MTV, the MTV Networks division also includes VH1, Comedy Central and Country Music Television.
Viacom's movie group, which includes Paramount and DreamWorks, booked more advertising costs in the first quarter compared with the same period a year ago, particularly on "Blades of Glory," which opened at the end of the quarter, and "Disturbia," which opened just after the end of the period. Viacom didn't provide a breakdown of how much was spent marketing each movie.