Net income rises 80% to $642 million
Hit pic “Transformers” powered Viacom’s profit and yanked its film biz into the black last quarter, and CEO Philippe Dauman said the company’s “very well positioned on an overall basis” to weather a WGA strike.But “in the longer term,” he added during a Friday conference call to discuss the earnings, “it depends how long the strike goes on.” He’s said “The Daily Show” and “The Colbert Report” would feel the heat first. Viacom’s total net income rose 80% to $642 million for the three months ended in September. The figure includes a $192 million gain from the sale of Canadian theater chain Famous Players in July. Without the gain, profit rose 27%. Revenue grew 24% to $3.27 billion. Viacom also recorded a $62 million compensation charge relating to the departure of former chief exec Tom Freston. Dauman touted “phenomenal success” with new franchise “Transformers,” which buoyed theatrical revenue to $490 million from $278 million and swung the unit to a profit of $72 million from a $7.8 million loss the year before. Homevideo sales grew 39% to $457 million. Total filmed entertainment revenue — theatrical plus homevid — rose 57% to $1.3 billion. At Viacom’s media networks, including MTV Nets and BET Networks, revenue rose 9% to about $2 billion. Profit nosed up 2% to $797 million as the higher revenue was partly offset by a 13% bump in expenses, including programming and compensation costs. Dauman, who’s now been in the job a little over a year, said advertising revenue rose 7%, with a double-digit jump in international ad revenue. He said the stable of networks is focused on developing original programming and expanding its digital reach. Total traffic on the company’s Web properties was up 39% this September from the same month in 2006. Dauman said Viacom looked at cable net Oxygen, recently acquired by NBC U, and continues to eye cable properties that come to market. But he said the company’s more focused on growing its existing businesses, and “the acquisitions we look at tend to be usually very small and very strategic.” After a decade of development, he said, “Transformers” has struck gold, taking in $700 million in worldwide box office. That pic, plus a boffo “Shrek the Third” from DreamWorks Animation, significantly outperformed “World Trade Center” and “Over the Hedge,” the big releases a year ago. Dauman was upbeat on the slate to year’s end and beyond, including Jerry Seinfeld’s “Bee Movie” (which opened this weekend at $39.1 million), “Beowulf,” “The Kite Runner” and “Sweeney Todd,” with Johnny Depp. He noted that “the highly anticipated but, adding to its mystique, still unnamed film” by “Lost” creator J.J. Abrams is coming in the first quarter of 2008. Steven Spielberg’s new “Indiana Jones” pic and “Iron Man,” produced with Marvel, will anchor the summer. A reconceived “Star Trek” by Abrams will close out the year. Dauman said Paramount, like other studios, has been preparing for the possibility of a strike and “has a good pipeline of movies that are already produced, or in production, which won’t be affected.” On the TV side, “for the most part across our family of networks, we will have very little to no impact,” he said. “A couple of shows over the next few months that are impacted that we have to look at are ‘The Daily Show With Jon Stewart’ and (‘The Colbert Report’ with) Stephen Colbert because of their topical nature. If there should be a strike, we will evaluate what we do in those timeslots. We’ll do obviously what we’ve done normally. We’ll have reruns for a while, and then we’ll see what we do with the format.” Strong numbers gave Viacom stock a nice bounce. It rose nearly 3% Friday to close at $41.56.