Earnings Down 36% at Viacom as Expenses Rise

The media conglomerate Viacom said yesterday that its first-quarter profit fell 36 percent, dragged down by revamping charges and higher costs at its MTV Networks, but the results beat Wall Street estimates. Read original article

Since returning to the company last year, Viacom’s chief executive, Philippe P. Dauman, has sought to overhaul the international operations while reorganizing sales to offer advertising across its television, Internet and other digital properties.

Viacom said profit was $202.9 million, or 29 cents a share, compared with $317.2 million, or 43 cents a share, in the period a year earlier when it completed the purchase of DreamWorks SKG, the live-action film studio, and began distributing DreamWorks Animation films.

Excluding revamping charges, Viacom’s quarterly profit was 34 cents a share, ahead of Wall Street expectations of 31 cents, according to Reuters Estimates.

Revenue at Viacom, which is controlled by Sumner M. Redstone, rose 16 percent, to $2.75 billion, exceeding Wall Street estimates of $2.55 billion.

Global ad sales rose 10 percent, to $974 million. Revenue at cable networks, which include MTV, Nickelodeon and VH1 channels, rose 10 percent on higher affiliate revenue, but operating income fell 3 percent on increased costs, including higher programming amortization and selling and marketing expenses.

Sales at the movie studio Paramount rose 27 percent, but it recorded an operating loss on higher print and advertising costs because of marketing expenses for “Blades of Glory,” which was released at the end of the quarter. Box-office sales from “Blades of Glory” will be recognized in the second quarter.

The company also struck a licensing deal with Daewoo Motor Sales of South Korea, which plans to build the first Paramount theme park outside of North America.

Viacom’s Class B shares declined 51 cents, to $41.51, on the New York Stock Exchange.