NEW YORK, N.Y. - Viacom Inc., the owner of Paramount Pictures, MTV and Nickelodeon, on Thursday said its net income rose 56 per cent in the latest quarter, even though a slate of movies that was lacklustre compared with last year held back revenue.
Viacom earned $585 million, or $1.07 per share, in the January to March quarter. That compares with $376 million, or 63 cents per share, it earned in the same period last year. Viacom has bought back shares, reducing stock outstanding and boosting earnings per share.
Excluding special items, earnings were 98 cents per share in the fiscal second quarter, 9 cents above the average analyst estimate as polled by FactSet.
The New York-based media company said its revenue rose 2 per cent to $3.33 billion, matching analyst estimates.
Revenue rose 5 per cent at Viacom's TV networks, and fell 5 per cent at Paramount, as movies like "The Devil Inside," ''A Thousand Words," and "Jeff, Who Lives at Home," did not match hits from last year like "Rango" and "No Strings Attached."
However, the lower movie revenue was more than offset by lower distribution costs, so Paramount's operating income expanded, contributing to the overall profit increase.
Viacom's Class B shares rose $1.49, or 3 per cent, to $48.92 in morning trading.
An issue that's been hanging over the company since the fall is a ratings decline reaching nearly 30 per cent at Nickelodeon, one of the Viacom's flagship networks. Analyst Todd Juenger at Sanford Bernstein has pointed the finger at Netflix Inc., which streams some Nickelodeon shows, like "Dora the Explorer."
But Juenger acknowledges that Netflix can't explain the all of the decline. On a conference call with analysts, Viacom CEO Philippe Dauman said viewing of Nickelodeon content on Netflix is 2 per cent of the time spent on watching the TV channel, so the "Netflix effect" is minimal.
"The Nick issue is complicated. There are ratings measurement issues. There certainly has been some compelling programming on some of our competitors, which we can clearly address," Dauman said. "We will do what we always do: We will research our audiences, we'll review our pipeline, add more diversity in our programming."
The ratings decline hasn't had an effect on Viacom's overall ability to sell ads, executives said, because the demand for advertising has been increasing.
