Media company Viacom Inc. reported 16% higher profit in its fiscal first quarter but revenue dipped -- raising worries on Wall Street about a slow-down in domestic advertising sales.
But blame Paramount Pictures, the Los Angeles-based movie studio, for Viacom's lower revenue in the quarter ended Dec. 31.
Studio revenue plunged 30% to $681 million because of fewer movie releases compared to the year-earlier period.
Paramount lost $74 million in the quarter, which was an improvement over the previous year period when the studio lost $139 million.
Paramount released just five films during the October-December quarter, including the heavily hyped "Anchorman 2: The Legend Continues" and Oscar contender "The Wolf of Wall Street." That compared to eight films in the previous year period.
Movie theatrical revenue fell 52% to $159 million for the quarter. Home entertainment sales suffered a 37% decline to $216 million.
Nonetheless, Viacom -- which owns the cable TV networks as MTV, Nickelodeon, Comedy Central and BET -- beat Wall Street estimates on strong earnings growth.
Overall, Viacom earned $547 million, or $1.20 a share, up from $470 million, or 92 cents a share in the previous year period.
Revenue was down 3.5% to $3.2 billion.
"Viacom turned in a solid performance in the December quarter," Viacom Chief Executive Philippe Dauman told analysts Thursday on a conference call to discuss earnings.
Analysts polled by FactSet were anticipating earnings of $1.16 a share on revenue of $3.3 billion.
Viacom's cable television networks -- propelled by children's channel Nickelodeon -- posted a strong quarter, but Wall Street analysts participating on the conference call seemed puzzled by an apparent hiccup in domestic advertising sales.
Ratings are up at Nickelodeon, and Comedy Central had a robust December among its core audience demographic of young adult men. MTV, however, had some ratings deterioration.
Television revenue was up 6% to $2.5 billion. Advertising revenue was up 4% to $1.3 billion. Fees paid by pay-TV operators for the Viacom channels increased 10% to slightly more than $1 billion.
"Domestic ad [revenue] was a bit light -- on the bright side, this was mostly offset by slightly stronger affiliate revenue," Wells Fargo Securities media analyst Marci Ryvicker wrote in a Thursday report.
Corporate cost-cutting also helped the bottom line.
"We continue to manage our cost-base prudently," Dauman said.
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