Viacom Beats Forecasts After Domestic Ad Sales Grow

(Bloomberg) -- Viacom Inc. shares rose the most in more than two months after executives touted what they say is the latest step in its turnaround story.

• Revenue and profit at the owner of MTV and Nickelodeon exceeded analysts’ forecasts in the third quarter of the company’s fiscal year thanks to domestic ad sales that grew for the first time in 20 quarters, the company said Thursday.

Key Insights

• Viacom has tried to offset viewership declines by charging higher prices and running more advertisements. Prime-time viewership of MTV has increased so far this season, according to Nielsen. The New York-based company cited its Advanced Marketing Solutions program for the rise in domestic ad sales.
• The Elton John biopic “Rocketman” and the horror film “Crawl” boosted Paramount Pictures. Sales rose 14% from a year ago, while adjusted operating income jumped 93%. “Rocketman” grossed $185 million worldwide, Paramount’s biggest release of the year thus far.
• Company executives provided no update on talks with CBS Corp., owner of the most-watched U.S. broadcast network. Both Viacom and CBS are controlled by the Redstone family, and have been talking about a merger for months.
• Domestic affiliate sales fell 1% from a year ago, as cord-cutting accelerated in the quarter.

Market Reaction

• Viacom shares rose as much as 5.4%, the most since May 30, to $31.28 in New York trading Thursday. They had climbed 15% this year through Wednesday, roughly in line with the S&P 500 index.

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To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III

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