Viacom Q2 Revenues Up 21 Percent

NEW YORK, July 30: While
revenues were up 21 percent to $3.86 billion, Viacom has reported a 6-percent
fall in second-quarter profit to $407 million, compared to the year-ago period.

Operating income,
meanwhile, increased 13 percent on the year-ago period to $792 million, which
is a growth of 11 percent compared to the prior year’s adjusted results. The
quarter’s diluted EPS was $0.65, a 3-percent increase.

Revenue gains for the
second quarter were led by a 35-percent increase in the Filmed Entertainment
segment, with a revenue growth of 35 percent to $1.77 billion. This was driven
by an 84-percent increase in theatrical revenues, primarily from the box-office
success of Marvel's Iron Man,
Paramount’s Indiana Jones and the Kingdom of the Crystal Skull and DreamWorks Animation's Kung Fu Panda. Home-entertainment revenues grew by 12 percent,
while television license fees rose 4 percent and ancillary revenues grew 35
percent, due in large part to an increase in the licensing and merchandising
sector from Transformers.

Media Networks revenues
grew 11 percent to $2.14 billion, led by a worldwide ancillary revenue growth
of 62 percent to $307 million, driven by the sales of the video game Rock
Band. Worldwide advertising
revenues were $1.17 billion, a 2-percent gain, while domestic advertising grew
by 1 percent. Affiliate revenues were up 12 percent to $656 million on a
worldwide basis.

"The strength of our
brands, the breadth of our portfolio and the proactive measures of our
management team have helped Viacom deliver solid results overall in the second
quarter,” said Sumner M. Redstone, Viacom’s executive chairman. “Viacom has a
strong financial position and we continue to build value for shareholders
through our ongoing share repurchase program."

Philippe Dauman, the president and CEO of Viacom, added, "Viacom delivered
strong top- and bottom-line results in the second quarter despite the
challenges of a weakening economy and its impact on advertiser spending. The
advantages of our growing multiple revenue streams were evident in the quarter,
as we delivered double-digit growth in both our affiliate and ancillary
revenues, led by the top-selling Rock Band music video game. We are just beginning to develop this new
franchise, which already has the largest music catalogue of any music video
game and 18 million songs downloaded since launch. The recently announced Rock
Band 2 will build on this success and should produce meaningful bottom-line
results next year.

"Paramount continues
to excel at the box office, generating $1 billion in both domestic and
international receipts in record time this year and delivering significantly
higher operating income. Driving Filmed Entertainment results in the quarter
were such global hits as Indiana Jones and the Kingdom of the Crystal Skull, DreamWorks Animation's Kung Fu Panda and the latest new franchise released by
Paramount, Iron Man. Looking
ahead, with a robust slate of films scheduled for release and in development,
Paramount is poised for continued long-term growth.

He continued: "We
will continue to take appropriate steps to adjust our cost structure while
maintaining our investment in new programming that will drive future revenue
growth. As a result of these efforts, we will be extremely well positioned to
capitalize on the opportunities that will emerge as economic conditions
improve."

—By Kristin
Brzoznowski