Viacom Sees Cable Gains, but Earnings Flat

Aug 4, 2005  •  Post A Comment

Sumner Redstone’s Viacom posted flat second-quarter earnings Thursday, even as the company’s cable networks unit continued to rack up gains.

The media giant reported a profit of $758.3 million, unchanged from a year ago. Revenue climbed 10 percent to $5.9 billion.

The company’s cable networks division fueled much of the growth, posting a 14 percent increase both in operating income and revenue, due to higher affiliate-fee and advertising revenues.

Television, meanwhile, saw a 16 percent decline in operating income and a 1 percent decline in revenue, due to lower television license revenues mainly related to the absence of “Star Trek: Deep Space Nine” in the 2005 quarter. Advertising revenue was up 4 percent despite a decline at the station group level due to softness at the local advertising level.

The results came as Viacom executives provided additional details on the strategy that will follow the company’s planned breakup early next year, in which CBS and UPN will form one company, while MTV Networks and Paramount Pictures form another. At that time Mr. Redstone will relinquish his CEO title and remain chairman of both companies.

Leslie Moonves, Viacom co-chief operating officer and CEO-designate of the forthcoming CBS Corp., repeated his commitment to exploring being compensated by cable and satellite operators for carriage of CBS and UPN, while adding he would also consider making content available for video-on-demand services as way to generate revenue.

Tom Freston, co-COO and CEO-designate of the new Viacom, which will include MTV Networks, said his focus will be on developing content for new broadband channels as well as international expansion.