Viacom Inc. (VIAB:US), the media company that owns Paramount film studios and cable networks such as Nickelodeon and MTV, topped analysts’ profit estimates after cutting expenses and getting more money from pay-TV providers.
Fourth-quarter net income from continuing operations advanced 12 percent to $643 million, or $1.24 a share, from $576 million, or $1, a year earlier, New York-based Viacom said today in a statement. Excluding some items, earnings were $1.21, topping the $1.17 predicted by analysts, according to data compiled (VIAB:US) by Bloomberg. Sales missed projections because of sluggish revenue from advertising and its film studio.
Viacom, controlled by Chairman Sumner Redstone, relies on its cable-television business for more than 90 percent of operating income (VIAB:US). While its networks have seen ratings decline, the company was able to increase revenue from cable providers, which pay Viacom to air its programming. Viacom is now working to boost viewership with new shows such as the “Teenage Mutant Ninja Turtles” series.
“I feel better about the steps we have taken,” Chief Executive Officer Philippe Dauman said today on a conference call with analysts. “We are living in a world where the media business is transitioning, and we can grow in that transition because we have a deeper understanding of the young people moving with that transition.”
Viacom rose 2.6 percent to $49.23 at the close in New York. The stock has climbed 8.4 percent this year.
The company’s domestic advertising revenue declined about 6 percent, and worldwide advertising revenues fell 7 percent. Revenue from programming fees -- paid by satellite and cable operators such as DirecTV (DTV:US) and Comcast Corp. (CMCSA:US) -- rose 12 percent domestically and 11 percent globally.
“History does show that cable networks have the potential to stop the bleeding,” Michael Nathanson, a media analyst with Nomura Securities Inc. in New York, said in a note before the earnings report was released. “We think signs of positive life are beginning to show.”
Total sales fell 17 percent to $3.36 billion in the fourth quarter, which ended Sept. 30. Analysts had estimated $3.42 billion on average.
Revenue from the company’s filmed entertainment division, which includes Paramount film studios, fell 39 percent to $1.09 billion. Viacom blamed a difficult comparison with the year-earlier period, when it released the hit movie “Transformers: Dark of the Moon.”
Viacom bolstered profit by cutting operating expenses and overhead costs. Selling, general and administrative expenses dropped 6.7 percent to $691 million.
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