NEW YORK (AP) ? Viacom Inc. posted an 18 percent drop in second-quarter net income Wednesday due to lower revenue, especially from the filmed entertainment division that includes Paramount Pictures.
It's a tough comparison to last year, when Viacom was raking in proceeds from "Mission Impossible ? Ghost Protocol." The company, which owns MTV, Comedy Central and other TV networks, actually surpassed Wall Street's profit expectations and saw a rebound in advertising revenue. Its shares rose more than 4 percent in morning trading after briefly hitting a record high.
Concern about Viacom's television audience ratings have largely faded as the company has added new programming and built on existing shows such as MTV's "Catfish" and "Teen Mom." That translates to an advertising revenue rebound and year-over-year growth, said Philippe Dauman, Viacom's president and CEO.
Advertising revenue grew 2 percent as they benefited from ratings improvements at some of the company's networks, compared with a 6 percent decline in the first quarter.
Dauman said further improvement in advertising revenue growth is expected for the current fiscal quarter compared with the numbers Viacom just put up.
The company reported earnings of $478 million, or 96 cents per share, in the January-March period. That's down from $585 million, or $1.07 per share, in the same period a year earlier.
Revenue fell 6 percent to $3.14 billion from $3.33 billion. Analysts had expected earnings of 95 cents per share on overall revenue of $3.18 billion, according to a poll by FactSet.
Viacom Inc., based in New York, owns MTV, VH1, Comedy Central and other TV networks.
Revenue from the media networks division grew 2 percent to $2.23 billion thanks to more robust advertising and affiliate revenue. Revenue at the Paramount filmed entertainment business dropped 20 percent to $971 million, from $1.17 billion.
Viacom faces the expiration of its licensing relationship with Netflix Inc. at the end of this month. Netflix has been paying Viacom for the right to show a broad range of its programming from channels like Nickelodeon, BET and MTV to its streaming customers. The company is now looking to license individual shows only.
In a conference call with analysts, Dauman said Viacom is in "constructive discussions with several parties, including Netflix" on licensing deals to distribute its content beyond the expiration if the Netflix deal.
"We continue to see such distribution to be a growing and complimentary avenue for our affiliate business," he said.
Viacom's more heavily traded Class B shares rose $2.62, or 4.1 percent, to $66.61 in late morning trading after earlier hitting an all-time high of $69.08. Viacom's stock began trading in its current form in late 2005, just before CBS Corp. separated into a separate company.
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