'Transformers,' 'Turtles' help drive Viacom's revenue up 9% in quarter

'Transformers,' 'Turtles' help drive Viacom's revenue up 9% in quarter
Viacom released its fiscal fourth-quarter earnings Thursday. Its Paramount Pictures film studio brought in more revenue during the period, boosted by "Teenage Mutant Ninja Turtles," a movie released in August. (Industrial Light & Magic)

Media company Viacom Inc. beat analysts' estimates for its fiscal fourth quarter earnings, boosted by higher fees charged to pay-TV operators for its cable channels and strong ticket sales for two summer films: "Transformers: Age of Extinction" and "Teenage Mutant Ninja Turtles."

The Los Angeles-based Paramount Pictures film unit was no slouch during Viacom's July-through-September period.


The fourth installment of "Transformers," directed by Michael Bay, surpassed $1 billion at the worldwide box office, with much of that falling during the latest quarter. The film was particularly popular in China.

The tenacious turtles left their tracks in theaters as well.

"Teenage Mutant Ninja Turtles," which was released in August, generated more than $450 million in sales worldwide.

Paramount's revenue rose 12% to nearly $1.4 billion. However, the film unit's operating income sank 27% to $213 million. That was largely because of a sharp drop in home-video sales and because of a tough comparison.

The Melrose Avenue film studio's year-ago quarterly income soared with the sale of Marvel picture distribution rights. Walt Disney Co. acquired the Marvel franchise. That easy money wasn't available this year.

Viacom overall reported net income of $732 million, or $1.72 a share, in the latest quarter, compared with $804 million, or $1.68 a share, in the year-earlier period.  The per-share profit exceeded analysts' expectations of $1.68 a share.

Viacom's stock buy-back program helped increase its earnings per share.

Revenue climbed 9% to $3.99 billion.

The company's stock rose after the earnings were released. Early in Thursday's trading session, the shares were changing hands at $70.85, up $1.60, or 2.3%. But the stock price remains down 18% since the end of last year.

Viacom's primary business is its cable television channels, including Nickelodeon, MTV, VH-1, Comedy Central and BET. Analysts had lowered their profit expectations during the quarter because of unexpected softness in the television advertising market.

But the company has been ratcheting up the fees it charges distributors to carry its channels, which prompted two smaller cable TV providers to drop the Viacom channels -- a move that alarmed investors and sent Viacom's shares down.

Media networks' fiscal fourth-quarter revenue increased 8% to $2.6 billion.  Its operating income jumped 10% to $1 billion.

Viacom executives were on the defensive about their channels being dropped by Suddenlink Communications and CableOne.

On a call with Wall Street analysts Thursday morning, Viacom Chief Executive Philippe Dauman called the two instances "isolated situations."


The company has renewed deals with the bulk of its distributors, and has forged new relationships with streaming services, which brings in new revenue, Dauman said. He touted Viacom's agreements with Verizon and Sony Corp., which is planning to roll out an Internet-delivered package of channels.

"Everyone wants our channels," Dauman said.

Twitter: @MegJamesLAT