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Viacom 3Q pumps up volume
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November 4, 1998: 3:21 p.m. ET
Media giant beats Street by 7 cents a share; Blockbuster revenue climbs
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NEW YORK (CNNfn) - Viacom Inc., owner of Blockbuster Video and the MTV network, turned up the volume on third-quarter earnings Wednesday, blowing past Wall Street estimates on the strength of double-digit growth in its entertainment and broadcasting segments.
As it looks to continue its strong growth, Viacom may be looking to buy another cable network. Chairman and CEO Sumner Redstone commented, "We certainly would be interested in expanding our cable networks business."
The media giant posted net income of $138 million, or 34 cents a diluted share, for the three months ended Sept. 30, down significantly from profits of $434 million, or $1.19 a share, a year earlier.
Those results, however, include the impact of discontinued operations in each period. In the third quarter of 1997, Viacom realized a gain of $416 million from the sale of Viacom Radio Stations but took a loss on the sale of Blockbuster Music and Virgin Interactive Entertainment this year.
On an operating basis, the company's profit surged to 39 cents a diluted share, from 3 cents a share last year.
Analysts expected Viacom to earn 32 cents a share.
"Viacom's exceptional third-quarter results highlight the across-the-board strength of our company," Redstone said. "In addition to the return to significant growth at Blockbuster, we continue to see outstanding performances at the Paramount studio and at the MTV and Showtime networks."
For the quarter, Blockbuster Video's same-store sales increased 19 percent domestically and 18 percent worldwide. That included same-store rental revenue increases of 18 percent domestically and 16 percent worldwide.
Redstone said that a possible initial public offering of Blockbuster Video was still on track, with the company spinning off anywhere from 10 to 20 percent.
Revenue from Viacom's network and broadcasting division rose 11 percent to $760 million, while its entertainment business grew 24 percent to $1.2 billion.
The company said its Paramount films division also was helped by the success of the movies "Deep Impact" and "The Truman Show."
For the first nine months, Viacom reported a net loss from continuing operations of $112 million, or 44 cents per share, compared with a loss of $155 million, or 57 cents per share, in the year-ago period.
Shares of Viacom (VIA) were trading at 62-1/2, down 7/16, Wednesday afternoon on the American Stock Exchange.
Asked whether the company had any interest in buying a broadcast network, Redstone replied, "Zero minus."
"We have no interest in it," he added. "What do we need CBS for or NBC? Viacom has reportedly considering buying CBS Corp. (CBS), but has repeatedly denied the reports. 
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Viacom
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