Viacom Profit Rises on Asset Sale, 'Transformers'
Viacom said Friday its quarterly profit rose 80 percent, boosted by the sale of its music publishing unit, strong cable advertising and blockbuster turnout for the alien robots movie "Transformers."
Viacom shares gained as much as 3.46 percent Friday on the New York Stock Exchange.
Results for the company, home to the MTV Networks cable television channels and the Paramount film studios, exceeded Wall Street forecasts.
"'Transformers' gave the movie studio the lift, and the cable networks continued to improve in revenue growth," said Gabelli analyst Christopher Marangi.
Viacom's third-quarter profit rose to $641.6 million, or 96 cents per share, from $356.8 million, or 50 cents per share, a year ago. The company recorded a $192 million gain for selling its Famous Music publishing unit in July.
Excluding the sale and other items, earnings per share for the 2007 quarter was 65 cents, above the average analysts' view of 60 cents per share, according to Reuters Estimates.
Revenue rose 24 percent to $3.27 billion. Analysts had forecast revenue of $3 billion.
By segment, Viacom's media networks business posted a 9 percent rise in revenue to $2 billion, while revenue from its film entertainment division surged 57 percent to $1.3 billion.
New York-based Viacom also posted a 7 percent rise in worldwide advertising revenue to $1.18 billion. Analysts said the company should continue to post growth despite concerns over the impact of a deteriorating housing market on the U.S. economy.
"One of the variables is the overall ad environment, but they should fare relatively well given the dual revenue stream and the international [business]," said Marangi.
Viacom, which is also home to the Nickelodeon and Comedy Central cable channels, has sought to extend its entertainment brands more broadly across the Internet.
Viacom has also lodged a $1 billion lawsuit against Web search leader Google and its video-sharing site YouTube over unauthorized downloads of its entertainment.
Chief Executive Philippe Dauman said last month the companies could work together in the future, but Google still needed to improve on recent efforts to better protect copyrights.
Viacom Class B shares are down 1.7 percent to date in 2007, compared with a 6.4 percent rise in the Standard & Poor's 500 Index in that time.