Viacom profit shoots up 80%
Strong earnings from the hit robot movie “Transformers” and the sale of a music-publishing business helped push Viacom Inc. to an 80% surge in third-quarter profit, the company reported Friday.
At the same time, the media conglomerate acknowledged that the anticipated Writers Guild of America strike could put a crimp in some popular programming.
Viacom, parent of cable TV’s MTV Networks and the Paramount Pictures movie studio, reported quarterly net income of $641.6 million, or 96 cents a share, compared with $356.8 million, or 50 cents, in the year-earlier period. Earnings from continuing operations rose 27% to $450 million. That came to 65 cents a share after excluding tax and restructuring adjustments of 2 cents a share.
Profit was boosted by a $192-million gain on the sale of Famous Music to Sony Corp. The results also included a $62-million charge related to the severance package for former Chief Executive Tom Freston, ousted in September 2006.
Revenue jumped 24% to $3.27 billion in the quarter, while operating income rose 25% to $815 million. Revenue and earnings topped the estimates of Wall Street analysts.
In a Friday morning conference call with analysts and reporters, Viacom CEO Philippe P. Dauman said two of the company’s top cable TV programs, Comedy Central’s “The Daily Show With Jon Stewart” and “The Colbert Report,” were especially vulnerable to a writers strike “because of their topical nature.”
A strike, authorized by the union Thursday, is set to begin a minute past midnight Monday morning, barring a breakthrough in negotiations this weekend.
“If there should be a strike, we’ll evaluate what we do in those time slots,” Dauman said. “What we do normally is we’ll have reruns for a while, then we’ll see what we do with the format.”
The two mock news shows, highly popular with young adults, employ about a dozen writers each, Comedy Central spokesman Steve Albani said.
He said the channel probably would organize batches of themed reruns around particular topics.
A prolonged strike, however, could complicate fake newsman Colbert’s recently announced (and fake) presidential campaign.
Otherwise, the company appears to be fairly well insulated, Dauman said. Viacom’s Paramount Pictures, like other movie studios, has been preparing for a strike and has “a good pipeline of movies that are already produced or in production which will not be affected,” he said.
The New York-based media conglomerate’s other cable TV channels largely rely on shows with fairly long lead times that are already completed or on unscripted shows, such as MTV’s reality soap opera “The Hills” and Spike TV’s bust-'em-up series “The Ultimate Fighter.”
Speaking of the strong third-quarter results, Dauman said “Transformers” enjoyed “phenomenal success” in theaters worldwide and in retail sales of its recently released DVD.
“Looking ahead,” Dauman said, “we are very pleased with our 2008 movie slate, which includes a broad spectrum of film genres across our family of brands.”
Reflecting last year’s acquisition of the DreamWorks SKG studio, Viacom’s filmed entertainment division logged an operating profit of $71.7 million, a turnaround from a $7.8-million loss in the year-earlier quarter.
The media networks division, including MTV, Comedy Central and Nickelodeon, showed operating profit of $796.8 million, up 2% from last year’s $777.7 million.