|
Viacom profits up 85%
|
 |
October 21, 1999: 3:30 p.m. ET
MTV helps earnings match estimates; Blockbuster spin-off still a consideration
|
NEW YORK (CNNfn) - Viacom Inc. used a large jump in revenues from the MTV network to nearly double its third-quarter earnings and meet Wall Street's expectations.
Separately company Chairman and Chief Executive Officer Sumner Redstone said the possible spin-off of its Blockbuster Inc. subsidiary remains on Viacom's drawing board, despite growing speculation to the contrary.
The New York-based media and entertainment company tallied first quarter profits from continuing operations at $159.4 million, 23 cents per share for the three months ended Sept. 30.
That marked an 85 percent increase from the $86.4 million, or 10 cents per share, Viacom earned a year earlier and matched the consensus analyst estimate compiled by First Call Corp.
Factoring in discontinued operations and an extraordinary charge, Viacom posted net profit of $96.7 million for the quarter, down from the $123.4 million it earned last year.
Overall, revenues inched up only slightly to $3.3 billion for the quarter despite a 15 percent gain in Viacom's network division, which includes MTV, VH-1, Showtime and UPN.
Much of that gain was directly attributable to the MTV networks, which posted a 17 percent gain in revenues to $554 million on the strength of double-digit ratings growth and strong advertising sales at both MTV and VH-1.
Overall revenues were hampered, however, by the company's entertainment division, which saw revenue fall 11 percent to $1.17 billion, primarily because the year-ago numbers included the record-setting home video release of Titanic.
For the year's first nine months, Viacom earned $287.3 million, or 40 cents per share, from continuing operations, more than doubling the $139.8 million, or 13 cents per share, it earned during the comparable period last year.
Redstone defends Blockbuster spin-off
In related news, Redstone reacted to growing speculation Viacom and CBS Corp. officials may scrap plans to spin-off Blockbuster following the $35 billion merger between Viacom and CBS next year.
Viacom, which still owns 82 percent of Blockbuster's stock, announced in August when the video rental chain went public that it intended to spin-off the company sometime next year.
But several sources indicated CBS officials, including the company's CEO Mel Karmazin, were considering abandoning that plan because of the current weakness in Blockbuster's stock, which remains below its $15 per share initial offering price. Redstone was said to share Karmazin's concerns.
Redstone, during a conference call with analysts Thursday, reiterated his intention to spin-off the company but hinted he might rethink that strategy if the company's stock price remains depressed.
"Let me say it remains our intention to split off Blockbuster from Viacom sometime after the first of the year," Redstone told analysts, according to Reuters, which monitored the conference call. "Having said that, we will not give it away."
"It is my hope and expectation that the market will recognize the value of Blockbuster, and that we will proceed in line with our original intention, to split off Blockbuster sometime after the first of the year," he said.
Viacom (VIA) shares slipped 3/8 to 40-3/4 in mid-afternoon trading. Blockbuster (BBI) shares were also down, losing 1/2 to 13-1/16.
-- from staff and wire reports
|
|
|
|
|
|
Viacom Inc.
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
