Viacom Revenues Up, Plans Harmonix Sale

NEW YORK: Excluding a $230 million goodwill impairment charge on its Harmonix gaming division, which has now been put up for sale, Viacom’s quarterly profit gained 7 percent to $488 million, on revenues that were up 5 percent to $3.3 billion.

However, including the charges from reclassifying Harmonix, developer of the Rock Band franchise, as a discontinued operation, Viacom’s quarterly profit plunged 59 percent in the quarter to reach $189 million.

"Viacom once again has delivered strong results that reflect the enduring value of our brands, our focused strategy and our disciplined management team," said Sumner Redstone, executive chairman. "We continue to benefit from the improving economy and look forward to even brighter days ahead."

Philippe Dauman, the president and CEO, added, "We are very pleased with the financial and operational results we delivered in fiscal 2010, which were the direct result of our continuing creative success. With a strong balance sheet and increasing free cash flow, we are delivering on our commitment to return capital to our shareholders with the institution of a quarterly cash dividend in the second quarter followed by the resumption of our stock repurchase program in October. Investing in our content and our brands has been and will continue to be the cornerstone of Viacom’s strategy. We never wavered from it even as we managed through the global recession. As a result, many of our cable networks today are achieving new ratings highs and producing hit shows that feed the cultural dialogue in the U.S. and abroad. This creative success coupled with the improving economy has fueled our advertising revenues, which were up 8 percent in the U.S. this quarter, our third consecutive quarter of sequential improvement. Our motion-picture business continues on its trajectory of controlling overhead expenses as it pursues a film strategy focused on franchises and brands. The studio is off to a great start in fiscal 2011 with the box office success of Jackass 3D and Paranormal Activity 2."

Media Networks revenues were $2.13 billion, an 8-percent gain, with a 7-percent hike in ad revenues to $1.17 billion and a 10-percent gain in affiliate revenues to $799 million. Filmed Entertainment revenues grew 1 percent in the quarter to $1.23 billion, with TV license fees up 18 percent to $372 million and theatrical up 3 percent to $372 million. Worldwide home entertainment revenues of $406 million represent a 13-percent decline over the prior year’s result, primarily due to fewer releases.