Profit Drops at Viacom

NEW YORK, May 10: Viacom’s first-quarter profit fell 36
percent to $202.9 million from $317.2 million as a result of restructuring
costs at MTV Networks, where some 250 jobs were eliminated.

Revenues for the quarter were up 16 percent to $2.7 billion,
but operating income was down 29 percent to $442.8 million, mostly as a result
of the $56 million restructuring charge at MTV Networks.

Philippe P. Dauman, president and CEO of Viacom, commented:
"Our first quarter results reflect our focused agenda to fully leverage
creative and operating excellence across all of our businesses. We moved
quickly to increase the efficiency of our domestic and international operations
to invest in content and our digital initiatives. This will allow us to drive future growth while maintaining
our overall margins. Also significant is the meaningful growth we experienced
in worldwide advertising revenues, with solid increases across MTV Networks and
BET Networks. These results reflect the continued strength of our brands and
the early benefits of our new, more integrated, multiplatform sales
organization.”

Media Networks revenues rose 10 percent to $1.73 billion,
led by a 14 percent growth in affiliate revenues to $558 million. Worldwide
advertising revenues were up 10 percent to $974 million. Ancillary revenues
increased 2 percent in the quarter to $201 million. The division’s operating
income fell 3 percent to $601.5 million.

Filmed Entertainment segment revenues were up 27 percent to
$1.05 billion in the quarter, but the division nonetheless posted a $105.7
million loss, versus last year’s $51.1 million profit.