Viacom Profit Drops 34 Percent

NEW YORK: First quarter revenues at Viacom fell 7 percent to $2.91 billion, with a profit for the period that was down 34 percent to $177 million.

The company attributed the lower results to reduced ancillary and ad revenues, as well foreign currency fluctuations. "The global economy continues to present significant challenges for all businesses, including those in the entertainment industry," said Sumner M. Redstone, the executive chairman of Viacom. "Viacom is successfully navigating these uncertain waiters by taking full advantage of our financial strength to invest in great content and to build on our enduring global brands."

Philippe Dauman, the president and CEO of Viacom, added: "During the first quarter, we further reduced our debt, generated seasonally strong cash flow and aggressively managed our costs while continuing to invest in our future with new programming and strategic partnerships. The overall advertising market remained soft as marketers continue to adjust their spending to the recessionary conditions. Nevertheless, our cable programming and motion picture businesses are well positioned to prosper. Our demographically targeted television programming continues to command top value in the marketplace…A trip to the movie theater was an increasingly popular entertainment option for consumers in the first quarter and Paramount benefited with double-digit growth in its theatrical revenues. Higher movie theater attendance trends bode well for our slate, including the ongoing success of DreamWorks Animation’s Monsters vs. Aliens as well as two major tentpole releases in the current quarter: J.J. Abrams’ Star Trek and Michael Bay’s Transformers: Revenge of the Fallen."

Media Networks revenues were down 8 percent to $1.87 billion, principally due to a 37-percent decline in ancillary revenues. U.S. advertising revenues decreased 9 percent, while worldwide ad intake fell 11 percent. Affiliate revenues, however, were up by 13 percent on a worldwide basis. The segment’s operating income fell 9 percent to $629 million.

Filmed Entertainment revenues decreased 5 percent, with theatrical revenues up 15 percent but home entertainment revenues were down 9 percent, as were television license fee revenues. Operating loss for the segment almost doubled to $123 million.