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Viacom Beats 2nd-Quarter Expectations

July 27, 2001|From Reuters

Media titan Viacom Inc. , whose properties include CBS, Paramount Pictures and MTV, posted stronger results Thursday in the second quarter, as the hit TV series "Survivor" and the film "Lara Croft: Tomb Raider" helped offset advertising weakness in its television and radio stations.

Still, Viacom nudged its cash flow expectations lower for the rest of the year. Many Wall Street analysts were already expecting such a move, noting the company was not immune to the advertising slump hitting the rest of the media business.

Shares of Viacom, which controls the Blockbuster video rental chain and owns the Simon & Schuster publishing house, rose nearly 7.71%, or $3.58, to $50 on the New York Stock Exchange.

The company reported a net profit of $17 million, or 1 cent per share, compared with a loss of $496 million, or 41 cents a share, a year earlier. The year-earlier figure includes charges from its acquisition of CBS.

The Wall Street consensus estimate was break-even on a per share basis, with estimates ranging from a loss of 6 cents to a profit of 4 cents, according to tracking firm First Call/Thomson Financial.

Viacom President Mel Karmazin sounded his usual bullish tone about the advertising market.

"I believe the advertising environment has bottomed out," he told analysts on a conference call. "The softness is temporary. I believe things are getting better."

Earnings before interest, taxes, depreciation and amortization, or EBITDA, rose fivefold to $1.36 billion from $272.8 million, including CBS acquisition charges in the year-earlier period. EBITDA is a common measurement of cash flow and is widely watched in the media business.

Revenue increased 18% to $5.72 billion from $4.85 billion.

On a pro forma basis, EBITDA rose 12% to $1.36 billion from $1.21 billion a year earlier, on revenue that rose 1% to $5.71 billion. This measure assumes that acquisitions made throughout 2000 and 2001, such as CBS and the BET cable networks, are included in both periods.

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