* 4th-qtr adj EPS $1.21 vs Wall Street view $1.17
* Revenue of $3.36 bln, about in line with forecast
* Domestic ad revenue falls 6 pct
By Jennifer Saba
Nov 15 Viacom Inc reported a rise in
quarterly profit, defying weak box-office sales and a
challenging advertising environment.
The company said on Thursday that fiscal fourth-quarter net
income rose 12 percent to $643 million even though revenue fell
"At the end of the day, I think they are really focused on
operating efficiency," Brian Wieser, an analyst with Pivotal
Research Group, said. "It's a company that can still grow its
margin even in a weak advertising market."
Viacom's shares rose nearly 3 percent to $49.32 in morning
Investors seemed undaunted by the challenges Viacom faces at
some of its most high-profile cable networks, MTV and
Nickelodeon, which are in a ratings slump.
Still, Viacom Chief Executive Philippe Dauman worked to
reassure analysts that Viacom is looking to right the course.
"It's highly successful," he said, responding to a question
about whether MTV was broken.
"Just this past Monday, 'Catfish,' which we premiered at 11
(p.m.) was the highest-rated launch in MTV history. So MTV is
very healthy, indeed," he said.
On Monday, Viacom announced Susanne Daniels, known for such
hit shows as "Buffy the Vampire Slayer" and "Dawson's Creek,"
joined MTV as the head of programming.
Producing hit shows and increasing viewership is important
to Viacom since it relies partly on advertising revenue, which
is closely tied ratings.
Domestic advertising revenue for the fourth quarter fell 6
Dauman signaled that advertising revenue growth would remain
in negative territory this quarter, although sequentially it was
expected to improve.
During the quarter, Viacom and satellite pay-TV provider
DirecTV Group had a showdown resulting in a bruising
10-day blackout this summer of Viacom's channels on DirecTV. The
dispute was over a contract regarding affiliate fees, or the
price that cable operators pay to air Viacom's channels. Viacom
said it had negotiated higher fees in the new deal.
That helped push up affiliate revenue 12 percent.
The company's filmed entertainment unit, which consists of
Paramount Pictures, said revenue fell 39 percent on tough
comparisons to last year when the studio released "Transformers:
Dark Side of the Moon".
Still, the company managed to increase operating income in
that division 5 percent because of TV and digital deals and cost
For instance Amazon Inc and Hollywood studio
partnership Epix, where Viacom is a joint owner, struck a three-
year deal to stream movies and TV shows to Amazon's Prime
Instant Video subscribers.
For the fourth quarter, total revenue was $3.36 billion,
roughly in line with analysts' expectations of $3.40 billion,
according to Thomson Reuters I/B/E/S.
Viacom posted adjusted earnings per share of $1.21 compared
with analysts' forecast of $1.17.
The company said it plans to purchase $700 million in stock
for the quarter ending in December and anticipates buying back
$2.5 billion during fiscal 2013.