Viacom profits up by 80% due to
cable ads, movie Transformers
5 November 2007:
Viacom Incorporated, owner of MTV and
the Paramount film studio, has
achieved a whopping 80% increase in
The feat has been possible mainly on
account of the earnings from the robot
movie Transformers and the sale
of a music-publishing business,
according to a statement from the
Viacom reported a quarterly net income
of $641.6 million – or, 96 cents a
share – compared with $356.8 million –
or, 50 cents – in the same period a
The company’s earnings from continuing
operations jumped by 27% to $450
million – which means 65 cents a share
after excluding tax and restructuring
adjustments of 2 cents a share.
The statement from the media
conglomerate, based in New York, the
United States, said that the
$192-million gains on the sale of
Famous Music to Sony Corporation
helped boost the profits.
In the third-quarter, revenue rose by
24% to $3.27 billion, and operating
income soared by 25% to $815 million.
The media networks accounted for 60%
of Viacom’s $3.2 billion in revenue
and over 92% of its operating income.
It may be noted that the revenue and
earnings have surpassed the estimates
of the Wall Street analysts.
Meanwhile, Viacom also said that if
the Writers Guild of America strike
happens, it may affect a few programs.
Philippe P Dauman, CEO of Viacom, told
reporters that Comedy Central’s The
Daily Show With Jon Stewart and
The Colbert Report – two of
Viacom’s top cable TV programs – were
especially vulnerable to a planned
strike by the writers because of their
The Daily Show With Jon Stewart
and The Colbert Report, the two
mock news shows highly popular with
young adults, employ about a dozen
writers each, according to a spokesman
of Comedy Central.
Apart from the threat of strike,
Viacom is fairly sitting pretty,
Philippe P Dauman told the media.
Viacom’s Paramount Pictures, like
other movie studios, has been
preparing for a strike and has “a good
pipeline of movies that are already
produced or in production which will
not be affected,” Dauman added.
He said the other cable TV channels of
Viacom mainly depended on shows with
fairly long lead times that are
already completed or on unscripted
shows, like MTV’s reality soap opera
The Hills and Spike TV’s The
On the spectacular results of the
third-quarter, Philippe P Dauman
remarked that Transformers
enjoyed phenomenal success in cinemas
worldwide and in retail sales of its
DVD released recently.
Viacom’s home-video division gained
from sales of earlier hits such as
Disturbia. According to industry
analysts, the home-video division
looks well set to benefit from
Indiana Jones and Star Trek
to be released in 2008.
Viacom’s filmed entertainment division
recorded an operating profit of $71.7
million, in contrast to a $7.8-million
loss in the quarter a year earlier,
reflecting Viacom’s acquisition of the
DreamWorks SKG studio in 2006, the
The media networks division, including
MTV, Comedy Central and Nickelodeon,
earned an operating profit of $796.8
million – a 2% increase from the
$777.7-million profit of 2006.