Nov. 3 (Bloomberg) -- Viacom Inc., the owner of MTV Networks and the Paramount Pictures film studio, said third- quarter profit rose 15 percent, more than analysts’ estimated, on higher box-office revenue and an easing advertising slump.

Net income increased to $463 million, or 76 cents a share, from $401 million, or 65 cents, a year ago, the New York-based company said today in a statement. Excluding tax benefits and costs to refinance debt, profit of 69 cents a share topped the 57-cent average of 22 analysts’ estimates compiled by Bloomberg.

Box-office sales for “G.I. Joe: The Rise of Cobra” and “Transformers: Revenge of the Fallen” helped drive movie profit, along with expense and job cuts, even as DVD sales continued to drop. Chief Executive Officer Philippe Dauman also helped offset lower television ad sales with higher affiliate fees paid by cable providers.

“The studio has some genuine hits on their hands,” Chris Marangi, an analyst with Gabelli & Co. in Rye, New York, said in an interview with Bloomberg Television. “The margins came in much better than expected. They’ve taken a lot of costs out.”

Viacom, controlled by Chairman Sumner Redstone, rose 63 cents, or 2.3 percent, to $28.68 at 4:03 p.m. in New York Stock Exchange composite trading. The Class B shares have climbed 50 percent this year, compared with a 16 percent gain for the Standard & Poor’s 500 Index.

‘Sharp Eye’

Revenue dropped 2.7 percent to $3.32 billion on falling advertising and DVD sales. Analysts predicted revenue of $3.29 billion, the average of 17 estimates compiled by Bloomberg.

“By keeping a sharp eye on costs while continuing to invest in programming, Viacom is in a strong position to benefit as the economic clouds begin to part,” Redstone said on a conference call.

U.S. ad sales fell 4 percent at the cable networks, including VH1 and Comedy Central, after declining 6 percent in the second quarter and 9 percent in the first. The drop was in line with an estimate from Michael Morris, a UBS AG analyst in New York.

It’s too early to predict how advertising sales will fare this quarter, Dauman said on the conference call.

Operating profit at the networks, also including Nickelodeon, MTV and BET, gained 1.6 percent to $773 million. Revenue was little changed at $2.12 billion. Worldwide affiliate fees increased 10 percent, more than the 7.5 percent growth predicted by Anthony DiClemente, a New York-based analyst with Barclays Capital.

‘Transformers’ Movie

The Paramount film division reported a $69 million operating profit, compared with a $19 million loss a year ago. That beat the $51 million projection from Morris at UBS.

“Transformers,” the top movie this year, was showing at theaters for seven days of the second quarter. That movie, along with “G.I. Joe,” drove a 16 percent increase in worldwide theatrical sales.

The film division’s revenue fell 6.5 percent as home entertainment sales dropped 21 percent.

Viacom has garnered $1.47 billion at U.S. theaters this year through Nov. 1, second behind Time Warner Inc., which owns the Warner Bros. studio, according to Box Office Mojo.

Redstone’s National Amusements Inc. last month announced plans to sell $945 million of CBS Corp. and Viacom shares to repay loans that threatened his control of the media companies. Closely held National Amusements, based in Norwood, Massachusetts, said it would repay all of its debt with the stock sales and disposal of other assets. His company capitalized on gains in CBS and Viacom shares this year, instead of selling as many of its theaters as originally planned.

“I am very pleased to get the events of the past year behind me,” Redstone said on the call.

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

Last Updated: November 3, 2009 16:18 EST