Net income increased to $376 million, or 63 cents a share, in the period ended March 31, from $245 million, or 40 cents, a year earlier, New York-based Viacom said today in a statement. Excluding a debt-extinguishment loss, earnings per share of 72 cents exceeded the 62-cent average of 22 analysts’ estimates.
Viacom topped estimates across its businesses, Michael Nathanson, an analyst at Nomura Securities International in New York, said today in a report. MTV is drawing viewers, advertisers are paying more for Nickelodeon’s kids programming and the Paramount film studio will release movies including “Super 8” from J.J. Abrams and “Transformers: Dark of the Moon.”
“Viacom reported a strong quarter,” Nathanson said. “Given the company’s continued ratings strength and a continuing rebound in the ad economy, we believe there is still upside for the stock.”
Viacom, controlled by Chairman Sumner Redstone, jumped $1.78, or 3.6 percent, to $50.63 at 4:15 p.m. in New York Stock Exchange composite trading, the highest price for the stock since the company split with CBS Corp. in 2006. The Class B shares have climbed 28 percent this year.
Advertising sales rose 11 percent in the U.S. and 12 percent worldwide last quarter, marking the fifth consecutive gain. Chief Executive Officer Philippe Dauman said ad sales will rise again in the current period, without offering specifics.
“We expect to deliver another quarter of sequential improvement in our domestic ad revenue growth rate,” Dauman said today on a conference call with investors.
Viacom’s U.S. ad growth trailed at least one competitor. Discovery Communications Inc. reported today that its cable channels, excluding Discovery Health after its conversion to the Oprah Winfrey Network, had gained 15 percent.
Total revenue rose 20 percent to $3.27 billion, topping the $3 billion average of 19 analyst estimates compiled by Bloomberg.
The media networks unit’s operating profit climbed 13 percent to $806 million. Sales at the division, which contributes 60 percent of the company’s total revenue, rose 11 percent to $2.08 billion.
Stronger ratings will help Viacom negotiate higher rates with advertisers during so-called upfront meetings next month, Michael Morris, an analyst at Davenport & Co. in New York, wrote in an April 20 report.
Viacom provides movies and TV shows to digital outlets including Netflix Inc. and Hulu LLC. A legal battle with Time Warner Cable Inc. erupted this month after the pay-TV system began streaming Viacom-owned channels to subscribers in the home through an application for Apple Inc.’s iPad.
Operating profit at the Paramount film studio was $39 million, compared with a loss of $83 million a year earlier, boosted by the box-office success of “Rango,” “Justin Bieber: Never Say Never” and “No Strings Attached.” The division’s sales climbed 38 percent to $1.23 billion from $886 million a year ago.
Paramount is releasing Walt Disney Co.’s “Thor” on May 6 and DreamWorks Animation SKG Inc.’s “Kung Fu Panda 2” on May 26, according to Imbd.com.
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