Viacom earnings exceed low expectations

Viacom Inc. (NYSE: VIA) today reported second quarter earnings that exceeded Wall Street's low expectations.

Net income was $434 million, or 63 cents per share, compared with $437 million, or 61 cents, the New York-based company said in a press release. Revenue rose 13% to $3.19 billion. Excluding gains and charges, profit was 54 cents. Analysts had expected earnings of 50 cents on revenue of $3.07 billion, according to Thomson Financial.

Advertising revenue rose 6% to $1.15 billion while affiliate fees jumped 15% to $577 million. Though profit was hurt by higher costs, revenue from its cable channels rose 10 percent to $1.92 billion, helped by a gain on the sale of MTV Networks' investment in Russia and an impairment charge from Amp'd Mobile.

Strong box office receipts from its Dreamworks SKG films "Shrek the Third" and "Over the Hedge" helped push up revenue in the Filmed Entertainment business by 20% to $1.31 billion. David Jones, an analyst with Miller Tabak & Co., told Bloomberg News that the unit outperformed his expectations by about $100 million.

Shares of Viacom are down more than 7% this year as investors continue to worry about who will succeed chairman Sumner Redstone who reportedly is feuding now with his daughter Shari.

"Revenue was better than expected because filmed entertainment outperformed by about $100 million or so,'' David Joyce, an analyst with Miller Tabak & Co. in New York, said in an interview. He has a "buy'' rating on the shares and doesn't own them.