Higher TV ratings at Nickelodeon and other cable channels helped fuel Viacom's fiscal second-quarter profit — making up for a soft quarter at movie studio Paramount Pictures.
Viacom, which also owns MTV, BET and Comedy Central, said higher advertising sales and increased fees charged for its cable channels contributed to its 4% profit gain for the period.
For the quarter ended March 31, Viacom earned $502 million, or $1.13 a share, up from $481 million, or 96 cents a share, in the previous year period. Excluding one-time gains, Viacom's earnings from continuing operations came in at $1.08 a share.
Revenue inched up 1% to $3.17 billion.
Viacom beat Wall Street's expectations, although some analysts had been expecting slightly higher domestic ad sales.
"We see an improved market as we go forward," Viacom Chief Executive Philippe Dauman assured analysts on a Thursday morning conference call.
Analysts queried by Thomson Reuters had been expecting earnings of $1.05 a share and revenue of $3.2 billion.
Viacom's crucial television division generated 6% higher revenue to $2.37 billion compared with $2.23 billion in the year-earlier period. Operating income was up 9% to $949 million compared with $873 million.
Ratings were higher at Nickelodeon with new shows "Wallykazam" and "Breadwinners," though domestic ad sales growth of 2% missed analysts' estimate of 3% growth.
But Paramount Pictures stumbled.
Paramount's theatrical revenue was down 17% as the studio's slate did not fare well internationally. The Melrose Avenue studio was helped by carry-over ticket sales from the December release of "The Wolf of Wall Street," which sold $116 million in tickets domestically and nearly $390 worldwide, but that wasn't enough to make up for a more meager box office overall.
Paramount's overall revenue declined 12% to $831 million, compared with $941 million in the previous year period. Its operating income plummeted 83% to just $11 million for the quarter.
The big news of the day was Viacom's $760-million purchase of Channel 5 Broadcasting in Britain.
Viacom said it would pay cash for the network, the fifth broadcasting service, which was launched in 1997.
"We think we can take Channel 5 to the next level," Dauman told analysts on the call.