Cost Cuts Boost Profit at Viacom

Viacom (VIA.B 28.65, +0.60) reported third quarter earnings that beat the consensus estimate as cost-saving initiatives and the strong performance of the latest Transformers movie helped offset lower advertising revenues.

Viacom reported third quarter earnings of $0.69 per share, $0.12 better than the First Call consensus of $0.57.  Operating income of $784 million increased 14% year-over-year.

Revenues fell 2.7% year-over-year to $3.32 billion; the consensus expected $3.3 billion.

Viacom operates in two segments: Media Networks and Filmed Entertainment.  The company said that revenues at Media Networks were essentially flat at $2.12 billion, with solid growth in affiliate sales offset by lower advertising and ancillary revenues.  Worldwide advertising revenues declined 5%.

Filmed Entertainment revenues were down 6% year-over-year to $1.22 billion as weakness in home entertainment sales was offset by growth in theatrical revenues.