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Viacom Profit Rises 9% on Ad Sales

October 24, 2003|From Associated Press

NEW YORK — Viacom Inc., the media conglomerate that owns CBS and MTV, reported a 9% increase in third-quarter earnings Thursday thanks partly to higher advertising revenue.

Viacom earned $700 million in the three months ended Sept. 30, up from $640 million in the same period a year ago. Per-share earnings were 40 cents, beating Wall Street's consensus estimate by 2 cents, as reported by Thomson First Call. The year-earlier earnings were equivalent to 36 cents a share.

Revenue rose 5% to $6.60 billion, driven by an 8% increase in overall advertising revenue to $2.88 billion.

Chief Executive Sumner Redstone said the gains came despite slower-than-expected growth in local advertising markets, which were not as robust as gains in national advertising.

Most of Viacom's businesses performed well in the quarter, except for outdoor advertising and entertainment, which includes the Paramount movie studio and related businesses.

The cable network division, a perennially strong performer that includes MTV and VH1, reported 20% higher earnings, and the television group, made up of CBS, UPN, a syndication business and an array of local TV stations, had 19% growth in earnings.

Earnings at Viacom's outdoor advertising business slumped 29% on lower revenue from advertising on U.S. transit outlets and billboards in Mexico. The entertainment division's net income fell 24%, which the company said was mainly because of higher advertising costs for movies.

For the first nine months of the year, Viacom earned $1.8 billion, compared with $73 million in the year-earlier period, when the company recorded a $1.48-billion accounting charge.

Without the charge, nine-month earnings were up 17%, and per-share earnings were $1.03, up from 87 cents.

Nine-month revenue rose 7% to $19.07 billion from $17.83 billion.

The earnings included a $40-million gain in the third quarter from the settlement of a business disruption claim in 2001, as well as the full share of results from Comedy Central. Viacom in May acquired the 50% stake in Comedy Central that it didn't already own.

The company's Class B shares rose 2 cents to $38.75 on the New York Stock Exchange.

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