NEW YORK (AP) — Viacom Inc. posted an 18 percent drop in second-quarter net income due to lower revenue, especially from the filmed entertainment division that includes Paramount Pictures. But a faster-than-expected recovery in advertising revenue at its TV networks sent shares to a record high Wednesday.
The results faced 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 nearly 3 percent in morning trading after briefly hitting an all-time 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.
Morgan Stanley analyst Benjamin Swinburne said the return to growth happened earlier than expected and was likely driven by improvement in Nickelodeon ratings and stronger demand among key advertising markets for the company's cable networks.
Viacom 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.
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