Viacom Profit Beats Estimates as `Jersey Shore' Bolsters MTV
Viacom Inc., the owner of MTV Networks and Comedy Central, said profit beat analysts’ estimates after higher viewership of its cable channels led to increased advertising sales.
Profit, excluding the sale of its Harmonix game business and tax benefits, was 75 cents, topping the 70-cent average of 26 analysts’ estimates compiled by Bloomberg. Viacom said today it will sell Harmonix, creator of the Rock Band music video game.
Net income declined to $189 million, or 31 cents a share, in the quarter ended Sept. 30, from $463 million, or 76 cents, a year ago, the New York-based company said today in a statement.
A surging recovery in ratings at MTV, driven by the hit show “Jersey Shore,” as well as Nickelodeon, TV Land and Comedy Central helped Viacom sell more television commercials at higher prices. U.S. ad sales gained 8 percent, compared with the 6 to 7 percent growth estimated by Evercore Partners analyst Alan Gould. Ad sales helped offset lower box-office revenue.
Total revenue rose 5 percent to $3.33 billion, compared with the $3.28 billion average estimate.
During the quarter, Viacom’s pay-TV channel Epix -- with rights to films from Paramount, Lions Gate Entertainment Corp. and Metro-Goldwyn-Mayer Inc. -- struck a deal to make itself profitable immediately. Netflix Inc. agreed to pay $900 million over five years for online streaming rights to Epix’s more than 3,000 films.
The company’s Paramount Pictures film studio made $219.3 million in movie theaters in the period, with its top release “The Last Airbender,” according to researcher Box Office Mojo. In the year-ago quarter, Paramount took in $351.3 million with the release of “Transformers: Revenge of the Fallen” and “G.I. Joe: The Rise of Cobra.”
Paramount has the second-highest box-office revenue this year. Last month, Walt Disney Co. agreed to pay Paramount at least $115 million for distribution rights to “Iron Man 3” and the “Avengers,” gaining full control of movies owned by its Marvel Entertainment unit. The payment is a minimum guarantee to Paramount, which had been hired to distribute Marvel films before the Disney acquisition.
As of Sept. 30, Viacom switched to a fiscal year that ends Sept. 30, instead of Dec. 31.
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