Viacom profit rises 16% but revenue falls

Media company Viacom Inc. reported 16% higher profit in its fiscal first quarter but revenue fell, largely because of a thin slate from its Paramount Pictures movie studio.

For the quarter ended Dec. 31, the Los Angeles studio’s revenue plunged 30% to $681 million because of fewer movie releases compared with the year-earlier period.

Paramount had been betting on its Will Ferrell comedy, “Anchorman 2: The Legend Continues,” to produce rosy results. But the film about fictional newscaster Ron Burgandy fell short of expectations. And Paramount released just five films during the quarter, compared with eight in the yearearlier period.

Paramount lost $74 million in the quarter, an improvement over the previous year when the studio’s deficit reached $139 million as it spent heavily to promote its more robust film slate.

Theatrical revenue fell 52% to $159 million in the quarter. It faced a tough comparison as the previous-year period featured the hit animated film “Rise of the Guardians.” Home entertainment sales suffered a 37% decline to $216 million.

But Viacom’s cable TV channels — Nickelodeon, Comedy Central, MTV and BET — rode to the rescue to help the company beat Wall Street estimates with higherthan-expected earnings growth.

Overall, Viacom earned $547 million, or $1.20 a share, up from $470 million, or 92 cents, in the same quarter a year earlier. Revenue was down 3.5% to $3.2 billion.

Analysts polled by FactSet were anticipating earnings of $1.16 a share on revenue of $3.3 billion.

“Viacom turned in a solid performance in the December quarter,” Viacom Chief Executive Philippe Dauman told analysts Thursday on a conference call to discuss earnings. “We delivered strong double-digit growth in both our quarterly earnings and operating income.”

Investors were pleased. Shares of Viacom, which is controlled by billionaire Sumner Redstone, rose $3.04, or 3.8%, to $84.01 on Thursday.

Viacom’s cable television networks showed strength, and Viacom executives said advertising sales have ticked up in recent weeks.

Television revenue was up 6% to $2.5 billion. Advertising revenue was up 4% to $1.3 billion. Fees paid by payTV operators for the Viacom channels increased 10% to slightly more than $1 billion.

Ratings are up at Nickelodeon and Comedy Central had a robust December among its core audience demographic of young adult men. MTV, however, experienced some ratings deterioration.

“Domestic ad [revenue] was a bit light — on the bright side, this was mostly offset by slightly stronger affiliate revenue,” Wells Fargo Securities media analyst Marci Ryvicker wrote Thursday. “After a slowdown in the ad marketplace in [the last quarter], demand appears to have picked back up ‘to normal’ this quarter.”