Net income climbed to $574 million, or 97 cents a share, in the period ended June 30, from $420 million, or 69 cents, a year earlier, New York-based Viacom said today in a statement. Excluding costs to cut jobs, earnings of 99 cents a share beat the 86-cent average of 25 analysts’ estimates.
Higher domestic ad sales at Nickelodeon, MTV and Comedy Central drove earnings growth, as well as affiliate fees from new deals with companies such as the Hulu LLC video-streaming service and Netflix Inc. (NFLX) Viacom follows Time Warner Inc. and CBS Corp. (CBS) in reporting rising earnings that topped estimates.
“They are right in lockstep with the rest of the industry in terms of the advertising rebound,” Tuna Amobi, an analyst at Standard & Poor’s in New York, said in an interview. “This was driven mostly by the media networks, and the next quarter we’ll see the studio kick in, and we’re starting to see digital deals become a major factor.”
Viacom, controlled by Chairman Sumner Redstone, rose 83 cents, or 1.9 percent, to $44.93 at 4:15 p.m. in New York Stock Exchange composite trading. The Class B stock have risen 13.4 percent this year.
Affiliate fees will grow by a percentage in the high-single to low-double digits every year for “the foreseeable future,” helped by new and renewed distribution agreements for Viacom’s films and shows, Chief Executive Officer Philippe Dauman said on a conference call.
“There is a lot more room for incremental growth from these types of deals, both in the U.S. and internationally,” Dauman said, referring to digital distribution agreements.
Viacom’s sales rose 15 percent to $3.77 billion, exceeding the $3.49 billion average of 21 analysts’ estimates compiled by Bloomberg.
Profit at the cable networks advanced 27 percent to $1.03 billion from a year earlier on sales of $2.39 billion, the company said. Domestic advertising sales increased 12 percent.
Film-studio profit declined 29 percent to $49 million on revenue of $1.41 billion.
“Transformers: Dark of the Moon,” the biggest U.S. movie of the year, was released June 29 and will lift profit this quarter, Michael Morris, an analyst at Davenport & Co. in Richmond, Virginia, wrote on July 29.
The third installment of “Transformers” from Paramount has garnered $340.4 million in U.S. and Canadian box-office sales through Aug. 3, according to researcher Box Office Mojo. Worldwide, the film has collected $1.01 billion in ticket sales, a sum shared with theater operators.
Box office revenue from “Transformers” and advanced sales of advertising for the television season starting next month will help this quarter’s results, Dauman said.
“Viacom has found its stride,” said Redstone, the 88- year-old chairman and founder.
Time Warner, owner of Warner Bros. film studios, said this week that second-quarter profit rose 14 percent, bolstered by revenue from its cable-television and movie businesses. Last quarter’s profit at CBS, also controlled by Redstone, more than doubled as sales of reruns and fees from cable TV increased.
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