Viacom Inc., owner of cable networks such as MTV and Nickelodeon, posted profit that topped analysts’ estimates amid improved television ratings, even as slowing advertising growth raised concerns for investors.
Excluding some items, fiscal fourth-quarter earnings were $1.55 a share, surpassing the $1.44 that analysts predicted on average, according to data compiled by Bloomberg.
Viacom, controlled by billionaire Sumner Redstone, relies on its television business for more than 90 percent of annual operating income. Advertising revenue advanced 10 percent last quarter to $1.28 billion, and licensing fees paid by cable and satellite systems increased 6 percent to $1.03 billion. While the advertising growth exceeded projections, Viacom predicted a slower increase in the current quarter.
“People thought there would be more staying power in advertising,” said Vijay Jayant, an analyst at ISI Group LLC.
Viacom’s shares fell 2.8 percent to $80.80 at the close in New York. The stock has climbed 53 percent this year.
On a conference call with analysts, Chief Executive Officer Philippe Dauman said he expects the company’s programming revenue from affiliates to grow in the “high-single to low-double-digit” percentages in the current quarter, while advertising growth will slow to a “mid-single-digit” percentage increase.
Net income jumped 25 percent to $806 million, or $1.69 a share last quarter, from $643 million, or $1.24, a year earlier. Sales advanced 8.6 percent to $3.65 billion. Analysts had estimated $3.59 billion.
Media networks revenue grew 7 percent to $2.46 billion, driven by growth in domestic advertising sales and affiliate fees, the New York-based company said.
The company purchased $2.7 billion worth of its own shares in the period, when it doubled the size of its buyback program to $20 billion -- about half of its market value.
“There were two positive takeaways from today’s release: accelerated advertising and a strong buyback,” Marci Ryvicker, a media analyst with Wells Fargo Securities LLC, said in a report.