Profits Down at Viacom

NEW YORK: Net earnings from continuing operations fell 5 percent at Viacom for the fiscal first quarter, while revenue was up 3 percent to $3.95 billion.

First-quarter operating income was down 2 percent to $1.02 billion, as higher Media Networks revenues balanced lower Filmed Entertainment ancillary revenues. Net earnings from continuing operations decreased 5 percent to $591 million, from the $620 million reported the same period last year.

Quarterly operating income dipped 2 percent, from $1.04 billion to $1.02 billion. The loss was attributable primarily to a decline in ancillary revenues in filmed entertainment.

Sumner M. Redstone, the executive chairman of Viacom, said, "Led by an exceptional executive team, Viacom executed on its mission to meet the challenges of a constantly evolving market and deliver value to shareholders. We continue to take advantage of our collective programming experience and brand leadership to bring our audiences distinctive and popular television and motion picture content on every platform—a strategy that will drive our success today and over the long term."

Philippe Dauman, the president and CEO of Viacom, added, "In the first quarter of 2012, Viacom proved that it has the creative capability, operational resolve and financial strength to deliver for shareholders despite short term economic headwinds. Our proven strategy of continuing to invest in creative content is fueling momentum across our properties. MTV, Comedy Central and BET were home to many of the top rated shows in the first quarter of fiscal 2012 and Nickelodeon remained the number one cable network for kids. Despite short term softness in the overall ad markets, Viacom’s quarterly results benefited from strong affiliate fee revenue growth, as our industry-leading portfolio of TV brands continued to attract traditional distributors as well as emerging digital services. Paramount Pictures also began the year with a strong performance in the theatrical market, with hits like Paranormal Activity 3 and Mission: Impossible – Ghost Protocol, which has generated approximately $575 million at the worldwide box office. We are looking forward to our slate of films for the 2012 calendar year and are already off to a strong start with the breakout performance of The Devil Inside, a low-cost genre film from Paramount’s Insurge Pictures label that has earned more than $50 million at the box office.

"Our solid operational performance in the first fiscal quarter of 2012 also enabled us to continue to produce healthy bottom line results, with a 4-percent increase in diluted earnings per share. Overall in the quarter, Viacom also directly returned more than $840 million to shareholders through dividends and our ongoing stock buyback program, even as we reduced our average borrowing costs and maintained the strength of our balance sheet."