New York: Viacom’s first-quarter profit topped Wall Street expectations, aided by a recovery in advertising sales and hit shows such as “Jersey Shore” on MTV.
Advertising sales rose 3% worldwide and 1% in the United States, signaling a rebound in a market dogged by one of its worst stretches in decades.
The company, which owns the MTV and Nickelodeon cable channels and Paramount film studios, said net income rose to $243 million, or 40 cents per share, from $177 million, or 29 cents per share, a year earlier.
Analysts on average had expected Viacom to earn 38 cents a share, according to Thomson Reuters.
Overall, revenue fell 4% to $2.79 billion, slightly below analysts average expectations. But that was largely due to a steep decline at Paramount, where revenue dropped 18% because it released fewer movies to the theaters in the quarter and continued to suffer from a slump in DVD sales.
Analysts, however, were focused on the advertising recovery, which has fueled a big rally in media stocks this year, with Viacom one of the main beneficiaries. Shares are up 19% year to date, far outpacing the broader Standard & Poor’s 500.
Chris Marangi, a portfolio manager with Gabelli & Co., described the results as strong, but he is waiting to hear management’s thoughts about a share buyback or even a dividend.
Marangi also said that the improvement in advertising sales should become even more evident as media companies head into the so-called upfronts, a period each spring when they introduce programming plans and book advance commercial sales.
“It’s going to a very strong upfront in the wake of 2009 advertising,” Marangi said.
In the first quarter, revenue at Viacom’s media networks division, which includes cable channels MTV and Comedy Central, rose 4% to $1.94 billion. Stronger ratings on some key cable channels -- particularly MTV, home to the hit “Jersey Shore” — helped the turnaround.
Paramount’s home entertainment sales, which includes DVD sales, fell 34%. But Paramount in on the verge of several releases that analysts expect to be hits, including “Iron Man 2.”