Viacom’s Karmazin pledges 20% free cash-flow growth

Feb 19, 2001  •  Post A Comment

Viacom President Mel Karmazin has upped the ante. He promised Wall Street that his company would generate $6.2 billion in free cash flow this year, 20 percent more than originally planned. That’s up from last year’s $5 billion. This is despite soft advertising, which he attributes solely to the absence of dot-coms. In an earnings call with analysts, Mr. Karmazin said the company has achieved greater post-merger cost savings and synergies than originally expected. The company’s cash-flow drivers –the TV business, cable networks and Infinity Radio-continue to outperform their industries. Viacom reported lower fourth-quarter profits of $30.2 million, or 2 cents per share, compared with $133 million, or 19 cents per share, a year earlier on a 78 percent rise in revenues to $6.36 billion. Viacom attributed the drop in profits to special charges mostly related to its CBS acquisition. Fourth-quarter earnings before interest, taxes, depreciation and amortization rose to $1.36 billion from $595 million a year earlier. Viacom said 2001 EBITDA should grow 20 percent to $6.2 billion.