April 30 (Bloomberg) -- Viacom Inc., owner of MTV Networks and the Paramount Pictures film studio, reported first-quarter profit that fell 34 percent as advertising slumped and a stronger U.S. dollar diminished international movie sales.

Net income dropped to $177 million, or 29 cents a share, from $270 million, or 42 cents, a year earlier, the New York- based company said today in a statement distributed by PR Newswire. Analysts projected profit of 25 cents a share, the average of 20 estimates in a Bloomberg survey. Sales declined to $2.91 billion from $3.12 billion.

The global recession and falling ratings for some channels reduced ad sales for the cable-TV unit. Viacom’s box-office and home-video sales were hit by the stronger dollar. Chief Executive Officer Philippe Dauman eliminated jobs in December to save money.

Viacom, which is controlled by Chairman Sumner Redstone, rose $1.46 to $20.44 yesterday in New York Stock Exchange composite trading. Before today, the Class B shares had gained 7.2 percent this year, compared with a 3.3 percent decline for the Standard & Poor’s 500 Index.

During the quarter, Redstone, 85, reached an agreement to refinance debts at his National Amusements Inc. He sold $233 million Viacom and CBS Corp. shares in October after their plunging prices put National Amusements in violation of loan terms.

Time Warner Inc., owner of the TBS cable channel and Warner Bros. film studio, yesterday reported first-quarter profit that beat analysts’ estimates after cutting marketing spending and jobs. Revenue at its cable networks gained 6 percent as subscription growth offset a 2 percent drop in ad sales. Film sales fell 7 percent on slower DVD sales. The company also said it will probably spin off its AOL Web unit.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

Last Updated: April 30, 2009 07:26 EDT