Viacom Profit Slips, But Outpaces Expectations
Viacom posted a bigger-than-expected quarterly profit Thursday, boosted by DVD sales and the box office hit "Shrek The Third," sending shares up 4%.
Executives at the New York-based owner of MTV Networks, Paramount movie studios and Nickelodeon cable channels also expected U.S. cable network advertising to improve in the third quarter, from a 4% gain in the second quarter.
Viacom's second-quarter profit fell less than 1% to $434 million from $437.3 million a year earlier. Earnings per share rose to 63 cents from 61 cents, as a result of a lower share count from a buyback authorization.
Excluding special items, Viacom's profit was 54 cents per share, beating Wall Street estimates of 50 cents per share, according to Reuters Estimates.
Gabelli & Co. analyst Christopher Marangi said quarterly results were "strong" and global ad revenue growth of 6% met expectations.
Viacom founder Sumner Redstone, who split off the company's broadcast divisions into the separately traded CBS in 2006, is embroiled in a public battle with his daughter, Shari, once seen as Sumner's natural successor.
The 87-year-old media mogul fired the first volley in a letter last month in which he said his daughter had made "little or no contribution to the building of the company."
Shari Redstone, 52, said through a spokeswoman that she would be willing to part with her estimated $1.6 billion stake in the business.
The public dispute raised questions over who would succeed Sumner Redstone, and fueled speculation that Viacom, or CBS, could be put into play. Redstone has publicly said he has not ruled out taking either Viacom or CBS private.
Revenue Outpaces Expectations
Viacom's revenue in the second quarter rose 13% to $3.19 billion, ahead of Wall Street expectations of $3.06 billion according to Reuters Estimates.
Movie studio revenue rose 20% to $1.3 billion and profit rose $17 million to $21.4 million, helped by a string of theatrical hits that also included "Blades of Glory" and "Disturbia."
Revenue from cable networks divisions including MTV Networks rose 10%. Profit rose 3%, hurt by $11 million in restructuring charges and higher programming expenses as it invested in new shows.
Viacom attracted an average of 85 million unique visitors to its Web sites in the past quarter, up 68% from last year.
The company will record a third quarter gain from the $370 million sale of music publisher Famous Music to Sony/ATV Music Publishing.
It reaffirmed its three year earnings per share excluding items growth in the low-double digit percentage range.
Viacom class B shares rose $1.36, or 3.6%, to $39.14 on the New York Stock Exchange.