Viacom share price up, profit beats expectations on blockbusters

Viacom Inc. reported better-than-expected results for the quarter ended September, boosted by the “Transformers: Age of Extinction” and “Teenage Mutant Ninja Turtles” movies.

Viacom, owner of the Paramount movie studio and cable network MTV and Comedy Central, stated a 9% increase in revenue to $3.99 billion, compared to last years result of $3.65 billion. Analysts polled by Bloomberg projected revenue of $3.9 billion.

According to Box Office Mojo, ”Transformers: Age of Extinction” has grossed $1.09 billion worldwide since opening June 27 and “Teenage Mutant Ninja Turtles” has grossed $464.2 million.

Viacom reported a 12% increase in revenue to $1.36 billion in its film-entertainment division, including a giant jump in theatrical revenue, which offset a 38% decline in home entertainment due to two fewer releases in the quarter.

For the fourth business quarter Viacom posted net earnings of $732 million, or $1.72 a share, compared to last years $804 million net earnings, or $1.68 per share. Earnings per share were boosted by less shares outstanding, the company bought back $850 million worth of stocks during the quarter.

Media networks revenue increased 8.3% to $2.66 billion, thanks to higher affiliate fees, payments that Viacom receives from cable and satellite TV operators and mobile operators for carrying its programs.

However, worldwide advertising revenue fell 2%, reflecting a decline in domestic advertisement, partially offset by a 33% increase in international advertisement, which benefited from the acquisition of Channel 5 in September.

CEO Philippe Dauman tried to calm investors down by saying that Viacom saw a “pickup in the marketplace” in the current quarter. Mr. Dauman also said he expected next quarters revenue to come close to the results of the three months ended September 30.

He also addressed fears that Viacom wont deliver the promised “high single-digit to low double-digit” affiliate fee annual revenue growth due to the fact that two small distributors dropped the companys channels earlier this year. Mr. Dauman said those were “isolated incidents” and pointed out that Frontier Communications, with a subscriber base of around 260 000, had signed on with Viacom.

“Interstellar”, the companys latest title, made $130 million worldwide in its debut weekend, including $50 million in North America.

“As we conclude another fiscal year, Viacom remains well-positioned as a creative leader with many of the worlds most innovative media properties and best entertainment brands” said Summer Redstone, executive chairman.

Viacom Inc gained 2.82% on Thursday and closed at $71.20 on NASDAQ, marking a one-year decrease of 14.35%. The company is valued at $29.31 billion. According to the Financial Times, the 27 analysts offering 12-month price targets for Viacom Inc have a median target of $85.00, with a high estimate of $110.00 and a low estimate of $71.00. The median estimate represents a 19.38% increase from the last price of $71.20