AOL TW, Sony, Viacom posts upbeat revs
More than a couple of media congloms’ rosy financial reports last week were hidden amid the thicket of negative press over AOL Time Warner’s fiscal travails.Too bad, because AOL TW saw its first quarterly profit since the mega-merger and posted revenues that beat Wall Street estimates. CEO Richard Parsons, unfortunately, delivered this good news while revealing that the conglom is the subject of n SEC inquiry of AOL TW’s accounting procedures. Nonetheless, AOL TW reported that income of $394 million in the second quarter swung from a $734 million loss the year before on a huge one-time accounting charge. Excluding all one-time items, cash earnings were flat from the prior period. Revenue rose 10% to $10.6 billion. A day later, Sony Corp. said it moved into profitability last quarter on the shoulders of “Spider-Man” and a sharp upturn in consumer electronics sales. Conglom posted net income of $481 million for the fiscal first quarter from a loss a year ago. Tokyo-based electronics-and-media behemoth enjoyed a 5% revenue climb to $14.7 billion in the fiscal first quarter, which ended in June. Sony Pictures’ sales jumped 28% to $1.5 billion as “Spider-Man,” the studio’s best-performing pic ever, grossed $675 million by the end of the quarter. “Panic Room” also weighed in, as well as DVD sales of “Black Hawk Down,” “The Mothman Prophecies” and “Not Another Teen Movie.” Upbeat numbers offset lower network TV revenue as that biz was consolidated, while Sony Music and the conglom’s massive games unit also marked sales slippage. Over at Viacom, Sumner Redstone and Mel Karmazin were offering an effective “I told you so” as they pointed to a firming ad market — which they’d repeatedly predicted — in reporting a profit surge to $574 million from $17 million. But the favorable comparison also was greatly enhanced by a stiff accounting charge in the year-earlier quarter. Excluding that item, profit last year was $524 million. So, Viacom still posted an impressive 10% rise in net income even on that basis. Revenue firmed slightly to $5.58 billion as ad sales picked up. Karmazin cited “exceptionally strong” upfront sales at CBS, UPN and cable nets and for syndicated fare. But it was back to the sticker bushes over at MGM. The Lion posted a broadened second-quarter loss of $121.8 million on big losses from “Windtalkers” after a writedown of at least $50 million on the underperforming war pic. “The film business is nonlinear — you have a few pictures that don’t work, followed by a few pictures that perform very well,” chairman-CEO Alex Yemenidjian shrugged. “It’s been that way for the past 80 years.” MGM’s quarterly red ink widened from a loss of $61.3 million in the same period a year ago. Revenue rose 23% to $336.9 million in the latest quarter. Saved by sale Barry Diller’s e-commerce group USA Interactive posted a $2.3 billion profit in the second quarter, thanks to a $2.4 billion gain on its sale of most entertainment assets to Vivendi Universal. Without the one-time gain, New York conglom would have shifted into the red from a year-earlier profit of $39.6 million. USAI saw a 19% improvement in revenue to $1.12 billion. A conference call on the quarterly results also elicited a couple of Diller pledges in keeping with the spirit of the SEC’s new fiscal-discipline agenda. Topper will personally sign off on USAI’s financial results from now on, and he spoke strongly against the use of lavish stock-option benefits to reward execs of public companies. Diller said USAI will expense any options awarded its execs, but also will begin replacing such “overly democratic” incentives with “restricted stock” that requires employees to have long-term vesting requirements and performance metrics. (Meredith Amdur in New York contributed to this report.)
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