Viacom Beats Targets

Guidance is in line.
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Viacom (VIA) - Get Report beat first-quarter earnings targets and guided in line for 2006, citing strong gains at its MTV and BET networks.

The New York-based media conglomerate made $317 million, or 43 cents a share, in the quarter ended March 31, down from the year-ago $350 million, or 47 cents a share. Revenue rose to $2.37 billion from $2.11 billion a year earlier. Analysts surveyed by Thomson Financial were looking for a 39-cent profit on revenue of $2.27 billion.

"We closed the acquisition of DreamWorks and sold the library, continued to make strong progress in the execution of our digital strategy and hit many all-time viewership highs at MTV Networks and BET Networks," said CEO Tom Freston. "We did face some challenges in the overseas ad market, but we have already taken steps that we believe will put that business back on track to deliver on its growth potential."

The latest-quarter revenue growth reflects a 7% increase in the Cable Networks segment and a 25% increase in the Entertainment segment, including DreamWorks. Advertising revenue, which accounted for 36% of total revenue in the quarter, increased 3% versus first quarter last year, while affiliate fees, representing 21% of total revenue, increased 9% and feature-film exploitation accounted for 34% of total revenue, an increase of 26%.

Consolidated free cash flow rose 17% from a year ago to $368.5 million.

Viacom said it and former corporate sibling

CBS

(CBS) - Get Report

are in a dispute over the dividend Viacom paid CBS when the two split Dec. 31. Viacom forked over $5.4 billion, but CBS claimed last month that the payout should have been $460 million higher. Viacom disagrees and has paid $170 million instead. The company said any further payment will be recorded as an adjustment to equity.

Viacom said it expects to make $1.95 to $2 a share on a continuing operations basis for the year, in line with the $1.96 Thomson target.