“Nickelodeon is clearly on the way back, with new live-action and animated hits that fueled robust ratings,” the Viacom chief executive, Philippe Dauman, said.
Ratings have been stabilizing at Nickelodeon, Viacom’s all-important children’s network, nearly two years after a sudden plunge that hurt the company’s ad sales and stoked concerns about future growth. Mr. Dauman said the month of July was Nickelodeon’s “sixth straight month of year-over-year ratings growth.”
Revenue at the company’s media networks division, which includes Nickelodeon and other cable channels like MTV and Comedy Central, increased 13 percent to $2.57 billion in the quarter, exceeding analysts’ expectations. But the results weren’t quite as bright at Paramount Pictures, the company’s filmed entertainment division. Revenue there was up 15 percent to $1.16 billion, but profits tumbled by more than half, largely, Viacom said, because of the timing of two film releases, “Star Trek Into Darkness” and “World War Z.”
“Next quarter will show significant profitability for Paramount, including from these two films,” Mr. Dauman told analysts in an earnings conference call. “But it will likely be moderately less than we anticipated due to the crowded tentpole schedule this summer and the delay of certain film licensing deals into next fiscal year.” Over all, Viacom reported net income of $643 million, or $1.31 a share, up from $534 million, or $1.01 a share, in the same quarter a year ago.
How pleased was the Viacom chairman, Sumner M. Redstone? For the second quarter in a row he called Mr. Dauman “the wisest man I have ever known” on the earnings call.
Analysts were impressed by Viacom’s 6 percent year-over-year increase in domestic advertising sales and its prediction of further increases in the summertime. The significance of digital distribution was underlined by a 28 percent increase in what Viacom calls domestic affiliated revenue, which includes new services like Amazon and Hulu. Mr. Dauman, like his rival chief executives at other major media companies, reiterated his view that the market for digital distribution was strong and growing.
Viacom also said on Friday that it would return yet more capital to shareholders by increasing its stock repurchase program to $20 billion, from $10 billion.
Reacting to that announcement, a Morgan Stanley analyst, Benjamin Swinburne, wrote in a note to investors on Friday morning that “four years after the recession, the media industry continues to be more aggressive optimizing portfolios (through spinoffs and M. A.) and their balance sheets through higher return-of-capital levels.” Viacom, he said, “has now just raised the bar for the group.”
Viacom stock, which has gained 50 percent so far this year, closed at $79.17 on Friday, up more than 6 percent from its previous close.
But, citing concerns about debt, Moody’s Investors Service downgraded Viacom’s long-term ratings to Baa2, from Baa1.
Article source: http://www.nytimes.com/2013/08/03/business/media/with-nickelodeon-on-the-mend-viacoms-earnings-soar-20.html?partner=rss&emc=rss
