Viacom Post Solid Quarterly Profit

By | October 24, 2002 at 12:00 AM

Viacom Inc., owner of CBS, MTV and the Paramount movie studio, reported a solid third-quarter profit Thursday, helped by strong advertising revenues at the company’s broadcast, cable, TV and radio properties.

For the three months ending Sept. 30, the media conglomerate said net earnings were $640 million, or 36 cents per share, compared with a net loss of $190 million, or 11 cents per share, a year earlier. The results beat the forecast of 32 cents a share by analysts surveyed by Thomson First Call.

“We are confident in our ability to deliver on our full-year financial targets for 2002, and we see the growth of our businesses becoming even more robust as we move into 2003,” said Sumner M. Redstone, chairman and chief executive of Viacom.

Third-quarter revenues were $6.3 billion, up 10 percent from $5.7 billion in the comparable 2001 period. Cable network revenues, which primarily are generated by ad sales and affiliate fees, rose 13 percent, while television revenues surged by 14 percent. Revenues at Infinity radio stations and outdoor advertising properties were higher by 6 percent. TV and Infinity revenues also correlate with ad sales strength.

“In the third quarter, exceptional ratings spurred CBS, MTV, Nickelodeon, TV Land, TNN and BET to double-digit ad sales growth, clearly outperforming their respective markets,” said Mel Karmazin, president and chief operating officer. “Our radio and TV station operations also delivered double-digit revenue growth and Viacom Outdoor, which continues to improve, had its first revenue growth quarter since the fourth quarter of 2000.”

The company’s Blockbuster business also showed an improved third-quarter performance, with video revenues increasing 10 percent to $1.4 billion. The company said the increases were the result of improved sales at stores open at least a year as customers reacted to Blockbuster’s new rental and retail initiatives.

Viacom also owns VH1, UPN, Simon & Schuster, Showtime and other properties. The conglomerate was formed by the 2000 merger of Viacom and CBS.

For the nine months ending Sept. 30, Viacom reported net earnings of $1.6 billion, or 87 cents per share, compared with a net loss of $181 million, or 11 cents per share, at the same time last year.

Revenue rose to $17.83 billion for the nine months from $17.18 billion a year ago.

Also, Viacom said that during the nine-month period it purchased approximately 19.7 million shares of its Class B common stock for approximately $813 million under its stock purchase plan. About $320 million of that was spent in the third quarter, and from Oct. 1 to Oct. 21, the company purchased an additional 2.1 million shares for $88 million. On Oct. 10, the company’s board approved a new purchase program to buy up to $3 billion of the company’s common stock.

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