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'Titanic' quarter at Viacom
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April 29, 1998: 10:36 a.m. ET
Box-office smash helps lifts cash flow by 3 percent, revenue by 6 percent
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NEW YORK (CNNfn) - Viacom Inc. Wednesday reported a 3-percent gain in cash flow in line with expectations due in large part to the success of "Titanic."
For the quarter ended March 31, the media giant reported that cash flow (defined as earnings before interest, taxes, depreciation and amortization, or EBITDA) rose to $405.7 million from $392.0 million in the year-ago period.
"Those numbers were in line with (our) forecast," said Phil Olsen of UBS Securities. The fixed-income analyst was estimating EBITDA of $405 million.
The results were led by a 21-percent jump in cash flow from the entertainment division, which includes the operations of film studio Paramount Communications. "Titanic" has already grossed nearly $1.6 billion worldwide in box office receipts.
And analysts like UBS's Olsen didn't appear to be concerned with tougher year-over-year comparisons going forward.
"Viacom has had a history of tough comparisons. I don't mind knowing it's going to be tough to replicate those numbers. It's clear the comparisons will be getting more difficult but the earnings will be felt in more than one quarter," he said.
Viacom's Simon & Schuster publishing unit offset some of the gains with negative cash flow of $46.9 million, more than double the $19 million reported in the year-ago period. Viacom announced its intentions to sell the educational, professional and reference publishing operation on Jan. 14.
"The management is putting in place the foundations that will allow them to return to growing the business," Olsen added.
In the latest quarter, net income totaled $1.4 million, which was equivalent to a loss of 4 cents a share after preferred stock dividends. The consensus estimate of analysts had predicted a loss of 16 cents, according to First Call.
For the first quarter of 1997, the net loss totaled $18.7 millioin, or 10 cents a share.
Total revenue in the latest period rose 6 percent to $3.08 billion from $2.9 billion.
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Viacom
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