Viacom Beats Profit Estimates on Higher Fees for TV Networks
Viacom Inc. (VIAB), owner of the Paramount film studios and cable networks such as Nickelodeon and MTV, narrowly topped analysts’ profit estimates on higher fees from the cable companies that carry its programming.
Excluding some items, earnings were 91 cents a share, the New York-based company said today in a statement. Analysts had predicted 90 cents, according to data compiled by Bloomberg.
Growth in payments from television distributors such as Comcast Corp. helped Viacom compensate for lower ad sales. Those fees increased 3 percent in the quarter, while ad revenue fell 6 percent. Total sales declined 16 percent to $3.31 billion, missing analysts’ estimates of $3.48 billion.
Viacom, controlled by Chairman Sumner Redstone, rose 1.7 percent to $60.35 at the close in New York. The stock has climbed 14.4 percent this year, outpacing the Standard & Poor’s 500 Index’s 5 percent gain.
Viacom relies on its television business for more than 90 percent of annual operating income. Ratings at its Nickelodeon network continue to be soft, Chief Executive Officer Philippe Dauman said on a conference call with analysts. He plans to improve the channel by more directly targeting the preschool audience.
“We want them to grow with us,” he said. “At the same time, we want to increase the amount and range of programming we have to appeal to all age groups.”
The company said the advertising market this quarter is seeing percentage growth in the mid-single digits. Fees from pay-TV companies are expected to rise as much as 10 percent this year, Dauman said.
The company, which also owns Paramount film studios, saw revenue decline 37 percent to $975 million because of weaker box-office performance.
Paramount took in $283.6 million in theatrical receipts for the last two months of the year, according to research firm Box Office Mojo. That was a 27 percent drop from the same period a year earlier, when the latest “Mission Impossible” film bolstered results.
To contact the reporter on this story: Edmund Lee in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Turner at email@example.com