Viacom profit up 56%, boosted by higher cable fees

 
Viacom Inc.'s second-quarter profit soared 56%, thanks to higher fees from pay-television operators and lower expenses at the company's Paramount Pictures movie studio.

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.  

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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

 

Star sightings and Leslie Moonves at Sumner Redstone ceremony

 

Two sides of Hollywood were on display Friday as billionaire Sumner Redstone, executive chairman of Viacom Inc. and CBS Corp., received his star on the Hollywood Walk of Fame.

Clustered outside the historic Hollywood Roosevelt Hotel were the industry's power brokers, all in suits: Redstone; CBS Corp. Chief Executive Leslie Moonves; Viacom CEO Philippe Dauman; Paramount Pictures Chairman Brad Grey and Vice Chairman Rob Moore; producer Brian Grazer; Viacom Chief Operating Officer Thomas Dooley and Entertainment Group President Doug Herzog, who oversees Comedy Central; and Cyma Zarghami, the head of children's channel Nickelodeon.

Another Hollywood contingent was there too: about 200 stargazers, many of whom began gathering more than an hour before the ceremony. They milled about in the street, separated from the power crowd by metal barriers.

"There's Julie Chen!" shouted one of the fans when the star of CBS' daytime talk show, "The Talk," strode into view.

"It is Julie Chen!" chimed in another fan, 20-year-old Jeremiah Miller, who lives in Hollywood and frequents the star-unveiling ceremonies. 

"Who's the guy in the gray suit next to Julie Chen?" Miller asked.

A reporter said the gray-suited man was Leslie Moonves, one of television's biggest titans -- as well as Chen's husband.

"Oh," Miller said, then turning to the other spectators:  "He runs CBS."

"I always hate the ceremonies where I never know people's names," Miller said. "You know who I would really like to see?  George Lopez."

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Top photo: Viacom and CBS Chairman Sumner Redstone, seated, received his star on the Hollywood Walk of Fame. Behind him from left: Viacom Chief Executive Philippe Dauman, Paramount Pictures Chairman Brad Grey and CBS Chief Executive Leslie Moonves.  Credit: Alberto E. Rodriguez / Getty Images 

Bottom photo:  Julie Chen. Credit: John P. Filo / CBS