Viacom profit up 56%, boosted by higher cable fees
For the quarter ended March 31, Viacom earned $585 million, or $1.07 per share, up from $376 million, or 63 cents a share, in the same period in 2011. Revenue grew 2% to $3.33 billion.
"Across our divisions we sharpened our focus on execution and efficiency while continuing to invest in programming that connects with audiences worldwide," Viacom Chief Executive Philippe Dauman told analysts in a Thursday morning conference call. "Distribution continues to be a strong and steady driver for Viacom."
The New York-based media company's earnings exceeded analysts' estimates while revenue was largely within expectations. The company, controlled by billionaire Sumner Redstone, also spent about $700 million during the quarter to repurchase 14.7 million shares.
The bulk of the company's earnings came from its Media Networks unit, which includes cable channels MTV, Nickelodeon, Comedy Central, BET, VH1 and TV Land. Revenue generated by cable channels grew 5% to $2.2 billion, driven by an increase in affiliate fees paid by cable and satellite television operators. Affiliate fee revenue was up 17%.
Media networks' operating income climbed 11% to $893 million. Domestic advertising revenue inched up 1%, while foreign advertising revenue remained flat.
"We are seeing encouraging signs of a strengthening ad market," Dauman noted.
At the Los Angeles-based Paramount Pictures, which is celebrating its 100th anniversary this year, revenue dropped 5% to $1.17 billion. The company attributed the lower revenue to a "less widely distributed mix of releases during the quarter," which included the highly profitable "The Devil Inside" and DreamWorks Pictures' Eddie Murphy vehicle, "A Thousand Words," which flopped.
Theatrical revenue was down 19% to $326 million for the quarter. The division was helped during the quarter by carry-over receipts from "Mission Impossible: Ghost Protocol," with Tom Cruise, which was released in the previous quarter.
Operating income at the film studio nearly tripled to $115 million, up from $39 million in the year-earlier period. The company said the studio's higher margin came from lower distribution costs.
"We are being disciplined in managing our expenses," Chief Operating Officer Thomas Dooley told the analysts.
-- Meg James
Photo: Eddie Murphy plays a cad named Jack in the DreamWorks comedy "A Thousand Words," released during the first quarter by Paramount Pictures. Credit: Bruce McBroom / DreamWorks Pictures