Viacom’s Quarterly Profit Up on Advertising Rebound

Viacom Inc. on Thursday reported higher quarterly profit, driven by stronger advertising at its MTV and Comedy Central cable channels and CBS network, and declared its first dividend since 1987.

The media company, home to Paramount Pictures, the UPN network and shows including “The Osbournes,” also raised its 2003 forecast for revenue and earnings.

Viacom said net income rose to $660 million, or 37 cents a share, in the second quarter, from $547 million, or 31 cents, a year earlier.

Revenue rose 10% to $6.42 billion while operating income in the second quarter rose 12% amid a boost from its recent purchase of venture partner AOL Time Warner Inc.’s stake in Comedy Central and from ad gains.

“Viacom’s earnings are pretty solid. Cable networks was a standout,” said Jordan Rohan, an analyst at SoundView Technology Group.

Viacom, which said this year that it would consider paying a dividend if the government changed its tax rules, said its board of directors declared a quarterly cash payout of 6 cents a share.

The company’s shares rose $1.50 to $44.45 on the New York Stock Exchange.

Viacom’s cable networks and TV divisions posted double-digit revenue gains, helped by strong advertising. Executives said they were optimistic about the ad outlook, seeing a 19% increase in total revenue from upfront ad sales for the fall TV season.

The company, which has been one of the strongest performers in the media sector in the last year, said it expected to deliver high-single-digit revenue growth and double-digit operating income growth for 2003.

Viacom’s Infinity Broadcasting radio unit was one of the few sore spots for the company. The group’s revenue and operating income fell, partially because of slow industry growth and the absence of warrants that helped year-earlier results.

But President and Chief Operating Officer Mel Karmazin, who vowed last quarter to revive the group, said he was feeling “guardedly optimistic” it was “seriously heading back. We are seeing improvements in the second half.”