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EARNINGS ROUNDUP

Cable Group Helps Viacom Record Profit

November 02, 2005|Sallie Hofmeister | Times Staff Writer

Viacom Inc. reversed a loss in the third quarter, driven by the continued strength of its cable group and a re-energized Paramount Pictures.

The New York media giant reported a profit of $708.5 million, or 45 cents a share, contrasted with a loss of $487.6 million, or 28 cents, a year earlier. That deficit stemmed from a $1.5-billion accounting charge to write down the value of its Blockbuster video rental subsidiary, which has since been spun off. Sales rose 10.5% to $5.9 billion.

The earnings were the last for Viacom before it splits into two separately traded companies at the end of the year.

On a conference call Tuesday, Chairman Sumner Redstone hailed the split, aimed at lifting Viacom's stagnant stock price, as a way to "unleash these pure-play powers." Under the plan, Viacom will cleave MTV Networks, its faster-growing cable powerhouse, from the more mature broadcasting arm, which includes CBS Television and Infinity Broadcasting.

The purity of the two new companies, however, could be short-lived. Leslie Moonves, who will run the broadcast company as well as Viacom's Showtime premium channel, is interested in buying advertising-supported cable channels.

"I don't see us competing with the other side of the family," he said in response to a question about reports that CBS was negotiating to buy the College Sports TV cable channel. "I don't see us buying a music channel or a kids' channel. We're looking at everything that fits into what we do."

Cable networks, which include MTV, Comedy Central and Nickelodeon, continued to be the growth engine for Viacom. During the quarter, income from cable programming jumped by 11% despite new programming investments.

On Tuesday, MTV Networks appointed Michael J. Wolf as president and chief operating officer. A veteran media consultant from McKinsey & Co., Wolf will report to Chief Executive Judy McGrath.

Profit from Paramount Pictures, which will join with cable channels under the new Viacom, soared to $109.7 million from $5.1 million a year earlier, with home video sales of such films as "The Longest Yard" constituting 60% of the quarter's revenue.

Broadcast television was weak because of a 25% decline in television licensing revenue from a year earlier, when CBS' "CSI" reaped huge sales in syndication.

Earnings from the troubled radio group inched up 1%, weighed down by an increase in programming and personnel expenses.

Viacom's Class B shares rose 58 cents, to $31.55.

In other entertainment-related earnings news:

* Sirius Satellite Radio Inc. posted a wider loss in the third quarter of $180.5 million, or 14 cents a share, from $169.4 million, or 14 cents, a year earlier.

* IAC/InterActiveCorp, which owns Ticketmaster, HSN shopping channel and the Ask Jeeves website, said third-quarter profit slid 24% to $68.1 million, or 19 cents a share, as costs related to the spinoff of travel website Expedia and other deals outstripped higher revenue.

* Cable TV company Charter Communications Inc. said it had earned $75 million, or 9 cents a share, contrasted with a loss of $3.3 billion, or $10.89, a year earlier.

*

Associated Press was used in compiling this report.

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