Viacom CEO Bob Bakish took a bit of a victory lap on Wednesday’s quarterly earnings call, talking up the dramatically improved financial picture at Paramount Pictures and plans to expand content production for outside buyers. Viacom’s investments in cutting-edge advertising sales efforts are also bearing fruit and the company is on track to generate $100 million in cost savings this year, most of which are coming from streamlining operations rather than layoffs.

But Bakish did not address the state of merger negotiations with CBS Corp., a corporate soap opera that has enveloped both companies since early January. A Viacom rep told the Wall Street analysts on the hourlong call that questions regarding “process with CBS” would not be answered, and in fact none were asked.

The much-improved financial picture for Viacom as evidenced in the company’s fiscal second quarter earnings adds a layer of complexity to the talks with CBS on the issue of valuation for Viacom in an all-stock transaction with CBS as the acquiring entity. Investors rewarded Viacom for Wednesday’s report by sending shares up by more than 2% in midday trading, although they finished out with just under a 1% increase to close at $31.18.

But the clear signs that Bakish’s leadership since being named CEO in December 2016 has allowed Viacom is pulling out of its long slump bolsters the argument from the Viacom side that Bakish has earned a big role as the No. 2 at the combined company to CBS Corp. chief Leslie Moonves. Shari Redstone, controlling shareholder of Viacom and CBS, is pushing for a Moonves-Bakish tandem management structure. But that has been a point of contention for Moonves, who wants to keep his core team intact anchored by CBS COO Joe Ianniello in the same role at the combined companies. The sides have continued to engage in discussions on a transaction during the past two weeks once temperatures cooled following a flurry of heated exchanges via media leaks earlier this month.

For sure, the bar for demonstrating improvements was low when Bakish took the reins. Viacom had been through more than a year of turmoil at the top under previous CEO Philippe Dauman and with the uncertainty about its future stirred by the failing health of longtime chairman Sumner Redstone. Bakish articulated a clear strategy that involved a massive overhaul of its Media Networks division that houses its domestic and international channels and a top-to-bottom management revamp at Paramount Pictures, which had been bleeding red ink for several years.

Bakish pointed to the success of “A Quiet Place,” the first movie developed and released by the new Paramount regime led by industry veteran Jim Gianopulos, as an indication of how much as changed on the Melrose Avenue lot in a short time. He praised the focus on cost discipline in the production of the pic and savvy marketing to drive word-of-mouth on the John Krasinski-Emily Blunt starrer. Since its April 6 debut, the pic has generated more than $130 million in domestic box office and $75 million overseas, with big territories including China still to come.

“Given that this movie was made for $20 million it’s a monster hit by every measure,” Bakish enthused. “It’s really a testament to the quality of the team [at Paramount]. At the end of the day, great management matters.”

Bakish credited Gianopulos with “systematically going through the business and improving its functionality and ability to deliver value. The (movie) greenlight process has been overhauled with respect to how decisions are made and the clinical-ity of that process.”

The results of Bakish’s mandates to focus on a few strategic priorities and to squeeze out cost savings through smarter use of resources and greater sharing of company-wide administrative needs is evident in the earnings for the quarter ended March 31. But so are the inherent weaknesses that Viacom, like other traditional media congloms, are facing in the future.

Domestic affiliate fees and advertising revenue at Media Networks — the single biggest driver of Viacom profits — were down slightly in the quarter. Viacom is projecting a return to growth in advertising by the end of the year and growth in affiliate fees by fiscal 2019. However, that growth will come in part because Viacom has absorbed significant affiliate fee rate reductions from major MVPDs that were implemented last year. Now that the subsequent quarters will reflect that lower overall base, gains that come contractual rate increases and from the addition of virtual MVPD subscribers will create incremental gains. Viacom also expects to harvest as many as 2 million fresh cable subscribers after reaching new distribution deals with Charter Communications and Suddenlink last year. Viacom went dark on Suddenlink entirely and had a strained relationship with Charter after years of heavy handed dealmaking under Dauman’s regime.

MTV, Comedy Central, and BET posted significant ratings improvement in the quarter. Bakish pointed to the success of MTV’s “Jersey Shore Family Vacation” as a sign that viewers are paying attention again. “The MTV turnaround is unquestionably taking hold,” he said.

On the advertising side, declining live linear ratings are an industry-wide problem. Bakish and Viacom CFO Wade Davis talked up the company’s investments in cutting-edge advertising sales initiatives, from better management of cross-platform sales across Viacom linear and digital properties to addressable ads even in linear TV. Viacom’s Advanced Marketing Solutions unit generated $300 million in revenue in the quarter and is growing at a fast clip.

Bakish referenced a company-wide initiative to make better use of existing production infrastructure and the company’s vast library of IP by producing more content — short-form and long-form — for non-Viacom outlets. The goal is to “much more aggressively tap into the huge demand for content,” Bakish said. The hope is to make more efficient use of production capabilities at Viacom’s domestic and international TV facilities. Some of the shows would flow through the Paramount Television division but others could come through the various channels. Telefe, the Argentine broadcaster acquired by Viacom last year, has production and IP resources that are just starting to be tapped, Bakish said.

“There is an incremental marketplace we can serve under the flagship brands. We see that as an incremental opportunity — licensing new IP or new IP that comes out of whole cloth,” Bakish said.

Among other highlights from the call:

  • Bakish cited mobile content licensing deals as an emerging market with big potential. The company is in talks with “a number of large carriers” in the U.S. in the hopes of adding to its international portfolio of mobile and direct-to-consumer offerings. Nickelodeon recently returned to the airwaves in Japan, one of the most lucrative international TV markets, through an OTT service after being dark for a decade.
  • Viacom Digital Studios is gaining steam with short-form content produced for Snapchat and a host of other platforms, some of which is designed to support linear Viacom TV properties. “All of this is just the tip of the iceberg,” Bakish said. Viacom Digital Studios will host a New Fronts event in New York on Monday to show off its wares.
  • With the upfront approaching, Bakish said the strength of the scatter market bodes well for a good market. With live linear ratings down, supply will be tight and Viacom intends to realize price increases. “We’re feeling very good about the upfront,” he said. “We’ll definitely be focused on price growth.”