FORT LAUDERDALE, Fla. (Reuters) — Blockbuster Entertainment Corp. Tuesday reported record first-quarter profits and revenues as its video rental operations turned in a strong performance.
Blockbuster, pledged to merge with cable TV company Viacom Inc. as part of that company’s takeover of entertainment giant Paramount Communications Inc., also cited its music retail and entertainment businesses for the strong results.
The Fort Lauderdale, Fla.-based company said profits rose 62% to $ 73 million , or 29 cents a share, compared with a year ago. Revenues rose 61% to $ 697 million.
Merger costs included
“It is important to note that the company achieved the significant increase in net income for the quarter after providing for all costs related to our agreement to merge with Viacom,” Blockbuster chairman H. Wayne Huizenga said in a statement.
Viacom unveiled a three-way deal earlier this year to acquire Paramount in a $ 10 billion takeover and then merge with Blockbuster, the nation’s leading video retailer, in a stock swap.
The deal was worth about $ 31 per Blockbuster share when it was announced, but the value has since fallen sharply along with Viacom’s stock. As part of the merger agreement, Blockbuster bought 23 million shares of Viacom stock for $ 1. 25 billion.
Viacom said last week that given current stock prices, its plans to merge with Blockbuster would be difficult to finalize.
Blockbuster shares ended unchanged at $ 25.38 on the New York Stock Exchange.