Viacom Ready to Roll Again

Following the lead of its crosstown rival, Viacom (VIAB Quote - Cramer on VIAB - Stock Picks) Thursday posted a mixed third quarter and reiterated its financial outlook.

The New York media giant said strong cable, video and television results outpaced a weak local advertising business -- which influences the company's TV station and radio station revenue -- in its latest quarter. Viacom's release came just a month after the company, which had been a darling of media investors, shocked Wall Street by warning of a slowdown in its ad business.

For the third quarter ended Sept. 30, earnings rose to $700 million, or 40 cents a share, from $640 million, or 36 cents a share, a year ago. Revenue rose to $6.6 billion from $6.3 billion a year earlier. In keeping with the numbers posted yesterday by New York media giant Time Warner (TWX Quote - Cramer on TWX - Stock Picks), Viacom's results were stronger than expected on the bottom line but a bit light on the top: Wall Street analysts had forecast third-quarter earnings of 38 cents a share on revenue of $6.7 billion.

Operating income rose 7% to $1.38 billion, and free cash flow surged to $708 million from $214 million a year ago, reflecting higher operating income as well as working capital improvements including lower investments in Blockbuster (BBI:NYSE) merchandise inventory.

The company said a strong contributor to third-quarter revenue was the advertising segment, where revenue rose 8% to $2.88 billion. "We delivered top line growth in nearly every business area and brought in significant operating income gains, all despite slower-than-expected growth in local advertising that did not keep pace with gains in the national ad market," CEO Sumner Redstone said. For 2004, he projected "expectations of a continued economic resurgence, a return to the historic mix of growth in advertising markets and the favorable impact of unique programming and political events during the coming year."

« Previous Page

1 2

Next Page »