Viacom Inc., owner of MTV Networks and Paramount Pictures, posted a 12 percent decline in first-quarter profit as a drop in home-entertainment sales lowered earnings at the Paramount Pictures film unit.
Net income fell to $610 million, or $1 a share, from $694 million, or $1.14, a year earlier, New York-based Viacom said today in a statement. Sales in the period ended Dec. 31 declined 4.8 percent to $3.83 billion, missing the $4.08 billion average of estimates compiled by Bloomberg.
Film-unit earnings dropped 77 percent, as “How to Train Your Dragon” and the latest “Shrek” DVD sales failed to match “Transformers,” “Star Trek” and “GI Joe” titles in the year-earlier period. Profit rose at cable networks including MTV and Comedy Central, as shows such as “Jersey Shore” helped lift ratings at MTV.
“Filmed entertainment results were a bit worse than we expected despite the strong box office,” Alan Gould, an analyst at Evercore Partners in New York with an “overweight” rating on the stock, said in a note to clients today. Home entertainment revenue declined “due to the very difficult comparisons.”
Viacom, controlled by Chairman Sumner Redstone, fell 42 cents to $43.55 in New York Stock Exchange composite trading at 4:02 p.m. The Class B shares jumped 33 percent in 2010, more than the 13 percent increase in the Standard & Poor’s 500 Index.
Jon Stewart to Hulu
Excluding one-time items, profit was $1.02 a share, compared with the 99-cent average analyst estimate. The company’s tax rate was lower than estimated, helping earnings per share exceed analysts’ estimates, Gould said.
Film-unit sales fell 16 percent, as box-office revenue from movies including “Jackass 3-D” and Oscar nominee “True Grit” was offset by the decline in DVD sales. Paramount distributes the “Shrek” and “Train Your Dragon” movies for DreamWorks Animation SKG.
“Jersey Shore” has posted record ratings in its third season, which began last month, and ranked No. 1 in the 18-49 age group advertisers covet, beating broadcast networks, MTV said last week. On Jan. 25, the company ordered a fourth season.
Yesterday, the company reached an agreement with Hulu LLC that restores Comedy Central’s “The Daily Show With Jon Stewart” and “The Colbert Report” to the ad-supported Hulu.com video service.
Viacom pulled the content in March 2010 and said then it would consider returning. As part of yesterday’s deal, “Jersey Shore” episodes will be available on the $7.99-a-month Hulu Plus service that competes with Netflix Inc. 21 days after the programs air on MTV.
News Corp., owner of Fox Broadcasting and the Twentieth Century Fox film studio, yesterday said quarterly profit more than doubled, led by its cable networks and broadcast fees.
Time Warner Inc., owner of Warner Bros., CNN and TNT, said television advertising gains and a box-office boost from the latest “Harry Potter” movie helped generate a 22 percent increase in net income. The New York-based company raised its dividend by 11 percent.