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UPDATE 2-Viacom shares hit after delay in Chinese studio payments, weak ad outlook

outlook@ (Adds comments on Huahua payment delays, updates shares)

Aug 3 (Reuters) - Viacom Inc, the owner of MTV, Comedy Central and Paramount, said on Thursday Chinese studio Huahua Media delayed a payment to the company in June and that it expected continued single digit declines in ad revenue this quarter, sending its stock down sharply after hours.

The company beat Wall Street's average estimate for revenue and profit in the latest quarter, helped by growth in affiliate sales, but investors appeared more focused on news of the Chinese deal hitting a snag.

In January, Viacom announced a $1 billion cash investment from two Chinese film companies, Shanghai Film Group (SFG) and Huahua Media, giving the U.S. studio much-needed cash and support as it attempts to grow.

Viacom executives said on a post-earnings conference call that Huahua's June payment under the deal was delayed.

As part of the agreement, SFG and Huahua Media will finance a combined 25 percent of all of Paramount's films for the next three years.

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New York City-based Viacom, like most of its peers, is struggling to keep viewers watching its channels as they flock to online streaming services such as Netflix Inc and Amazon.com Inc's Prime Video.

With fewer people watching live television, TV ratings and ad revenue have taken a nosedive. Viacom's domestic advertising revenue fell 2 percent in the third quarter, its 12th consecutive dip in U.S. advertising revenue, in line with analysts' expectations, according to FactSet.

The company said it expects another low single-digit decline in the current quarter.

Viacom's domestic affiliate revenue, the fees it collects from cable TV operators as well as online distributors, rose 4 percent to $1.01 billion.

That was ahead of the 2.8 percent rise in domestic affiliate revenue analysts expected, according to financial data and analytics firm FactSet.

Operating income from filmed entertainment also returned to growth for the first time since the fourth quarter of 2015.

The company's shares initially rose after the earnings release, but then fell 8 percent to $32.15 after the comments on Huahua.

Excluding items, the company earned $1.17 per share. Analysts on average had expected to earn $1.05 share, according to Thomson Reuters I/B/E/S.

Net profit attributable to Viacom rose to $683 million, or $1.70 per share, in the third quarter ended June 30 from $432 million, or $1.09 per share, a year earlier.

Revenue rose 8.3 percent to $3.36 billion, beating analysts' expectation of $3.29 billion.

Viacom said in February that as part of a turnaround plan orchestrated by new Chief Executive Bob Bakish, it is focusing on six of its brands - Paramount, BET, Comedy Central, MTV, Nickelodeon and Nick Jr.

Last month, Viacom tried to buy Scripps Networks Interactive , home of such lifestyle networks as Food Network, HGTV and the Travel Channel, but was outbid by Discovery Communications, which announced on Monday it is buying Scripps for $11.9 billion. (Reporting by Aishwarya Venugopal in Bengaluru and Jessica Toonkel in New York; Editing by Maju Samuel and Bill Rigby)