Viacom Inc., owner of MTV Networks and Paramount Pictures, posted a 12% decline in fiscal first-quarter profit as a drop in home-entertainment sales lowered earnings at the Paramount Pictures film unit.
Net income fell to $610 million, or $1 a share, from $694 million, or $1.14, a year earlier, New York-based Viacom said Thursday. Sales in the period ended Dec. 31 declined 4.8% to $3.83 billion, missing the $4.08-billion average of estimates compiled by Bloomberg.
Film-unit earnings dropped 77%, as "How to Train Your Dragon" and the latest "Shrek" DVD sales failed to match "Transformers," "Star Trek" and "GI Joe" titles in the year-earlier period. Profit rose at cable networks including MTV and Comedy Central, as shows such as "Jersey Shore" helped lift ratings at MTV.
"Filmed-entertainment results were a bit worse than we expected despite the strong box office," said Alan Gould, an analyst at Evercore Partners in New York. Home-entertainment revenue declined "due to the very difficult comparisons."
Shares of Viacom, controlled by Chairman Sumner Redstone, fell 42 cents to $43.55.
Excluding one-time items, profit was $1.02 a share, compared with the 99-cent average analyst estimate. The company's tax rate was lower than estimated, helping earnings per share exceed analysts' estimates, Gould said.
Film-unit sales fell 16%, as box-office revenue from movies including "Jackass 3-D" and Oscar nominee "True Grit" was offset by the decline in DVD sales. Paramount distributes the "Shrek" and "Train Your Dragon" movies for DreamWorks Animation SKG.
"Jersey Shore" has posted record ratings in its third season, which began last month, and ranked No. 1 in the 18-to-49 age group advertisers covet, beating broadcast networks, MTV said last week. The company has ordered a fourth season.
On Wednesday, the company reached an agreement with Hulu that restores Comedy Central's "The Daily Show With Jon Stewart" and "The Colbert Report" to the ad-supported Hulu.com video service.
Viacom pulled the content in March 2010 and said then it would consider returning. As part of Wednesday's deal, "Jersey Shore" episodes will be available on the $7.99-a-month Hulu Plus service that competes with Netflix Inc. 21 days after the programs air on MTV.