Viacom Q1 earnings down 36% on film costs
EmptyNEW YORK -- Viacom Inc.'s earnings fell 36% in the first quarter, weighed down by higher marketing expenses for movies and a restructuring charge at its MTV group, the media company reported Thursday, but the results still beat analysts' estimates.
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Viacom, which is controlled by media mogul Sumner Redstone and split up from CBS Corp. a year ago, earned $202.9 million, or 29 cents a share, in the three months ending March 31, down from $317.2 million, or 43 cents a share, a year earlier.
In addition to MTV, Viacom also owns Paramount Pictures, DreamWorks,VH1 and BET.
Excluding the after-tax cost of $35 million for the charges at MTV, the per-share earnings were equivalent to 34 cents, ahead of the 32 cents that analysts were expecting, according to Thomson Financial. Revenues grew 16% to $2.75 billion.
Viacom's Class B non-voting shares rose 27 cents to $42.29 in early trading Thursday, close to the top of their 52-week range of $32.42 and $43. The shares are up 2.4% so far this year; CBS's shares are up 1.8%.
Operating income fell 29% to $442.8 million from $623.5 million a year ago, weighed down by the restructuring charge at MTV Networks, and an increase of $170 million in advertising costs in the United States at Viacom's movie division.
MTV Networks said in February that it was cutting 250 jobs, or about 6% of its work force, in an effort to cut costs and build up its businesses online and in new networks. In addition to MTV, the MTV Networks division also includes VH1, Comedy Central and Country Music Television.
Viacom's movie group, which includes Paramount and DreamWorks, booked more advertising costs in the first quarter compared with the same period a year ago, particularly on "Blades of Glory," which opened at the end of the quarter, and "Disturbia," which opened just after the end of the period. Viacom didn't provide a breakdown of how much was spent marketing each movie.
Viacom is currently battling with Google Inc.'s YouTube, the No. 1 video site on the Internet, claiming that the site is illegally displaying copyright-protected clips from popular Viacom-owned programs like Comedy Central's "The Daily Show with Jon Stewart" and Nickelodeon's "SpongeBob SquarePants."
Google says YouTube complies with copyright laws and takes down any material flagged by copyright owners as being unauthorized.
On a conference call with analysts, Viacom CEO Philippe Dauman reaffirmed the company's goal of achieving $500 million in revenues from digital businesses this year.