Viacom's Rosy Results Poised to Boost Negotiations With CBS
(Bloomberg) -- Viacom Inc. posted better-than-expected results and said that its Paramount Pictures studio has returned to profitability, buoying the entertainment giant as it negotiates a merger with CBS Corp.
Second-quarter earnings amounted to 92 cents a share at the owner of MTV and Nickelodeon, excluding some items. That was well ahead of the 79 cents predicted by analysts.
Sales at Viacom’s international TV networks also grew 18 percent from a year ago, lifting sales across Viacom’s media networks group. Viacom reported overall sales of $3.15 billion, beating the average Wall Street estimate of $3.04 billion.
The company also pointed to the release of Paramount’s “A Quiet Place” as a sign of the studio’s comeback. The film, the first produced by the division’s new management team, was a box-office hit.
The shares climbed as much as 1.3 percent to $31.33 in the wake of the results. They had been little changed this year through Tuesday’s close.
Viacom Chief Executive Officer Bob Bakish has invested in international networks to counter the struggles of his domestic cable channels, which suffered declines in advertising sales and fees from pay-TV operators in the quarter. Bakish ran the international networks before taking over as CEO, and bought Argentinian broadcaster Telefe in his first major deal after taking the top job.
Growth at the international networks should strengthen Viacom’s hand in negotiations with CBS. The two companies, both controlled by the Redstone family, have swapped proposals to merger in recent weeks, but have been unable to agree on price and management.
CBS is the more reluctant of the two parties, citing the decline of Viacom’s U.S. cable networks, but Viacom executives have stressed the company’s growing portfolio of international assets as a reason for CBS to want to merge. Viacom has also been investing in off-TV extensions of its networks, such as theme parks and toys.
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