Viacom said profit in its third fiscal quarter rose as the company saw positive ad sales from its cable networks for the first time in about five years.
The New York owner of Nickelodeon, MTV and the Paramount movie studio said net income rose to $544 million, or $1.35 per share, in its fiscal third quarter, compared to $522 million, or $1.29 per share, in the year-earlier period, representing a 4.2% increase in profit.
Operating income rose 1%, to $757 million from $752 million, Viacom said. Revenue rose 4% to nearly $3.36 billion, from nearly $3.24 billion in the year-earlier period.
The results come as Viacom is engaged in ongoing talks about merging with CBS Corp., the media conglomerate that is, like Viacom, controlled by the Redstone family’s National Amusements Inc. movie-exhibition chain. The two companies have pondered a corporate tie-up twice in recent years, prodded by the desire of Shari Redstone to gain more scale in an industry where consolidation has created giants like a newly expanded Walt Disney Company; an AT&T-controlled WarnerMedia; and an NBCUniversal backed by cable giant Comcast. But those talks have grown more serious, with the two companies agreeing on a possible executive structure for the combined entity.
Viacom offered no detail about the status of its deliberations with CBS in its corporate earnings release Thursday, but put attention on the company’s work to improve its financial results as it grapples with the migration of younger viewers – the very people who form the bedrock audience of many of its cable networks – to new technologies such as streaming video and mobile devices.
Instead, on an call with investors Thursday morning, Viacom CEO Bob Bakish pointed toward the company’s recent operating results. He noted that the Paramount movie studio was profitable so far this year, and put a spotlight on advertising revenue. Executives on the call cited advertiser interest in so-called advanced advertising products, which include audience targeting and data-driven placement, and noted Madison Avenue was committing more to Viacom for those offerings.
Viacom said revenue in its film operations rose 14% to $877 million, citing increases in licensing and home entertainment revenue. Revenue from theatrical releases, however, was offset by the performance of the prior quarter’s release of “A Quiet Place,” despite good results from films such as “Pet Sematary” and “Rocketman.”
Revenue from the company’s flagship TV networks flat, with a 3% increase in overall ad sales offset by a 1% decline in affiliate sales and an 18% slump in revenue from consumer products. Viacom said U.S. advertising revenue rose 6% in the third quarter..
More to come…