The parent company of CBS and MTV Networks posted net income of $659.6 million for the quarter, up 20.7% over the year-ago period. Revenues rose 10% to a record $6.42 billion. It was the best second quarter in Viacom's history, said Chairman-CEO Sumner Redstone.
Weakness in radio
In a conference call with analysts, management said the revenue increases were led by Viacom's cable, network TV, outdoor and video units, partly offset by continued weakness in radio.
Advertising revenue rose 11% during the quarter, or 9.5% after adjusting for the acquisition from AOL Time Warner of its half of cable network Comedy Central in May, Chief Financial Officer Richard Bressler said. Cable ad revenue rose 31%, with seven points due to the addition of Comedy Central, while broadcast and outdoor ad revenue both rose 9%.
Radio revenue dropped 3% year-over-year, but showed sequential improvement. President and Chief Opearting Officer Mel Karmazin noted revenue was down 1% in April, flat in May and up 8% in June, with July tracking ahead of last year.
"In a difficult economic time, complicated by the war in Iraq, we continued to execute extraordinarily," said Mr. Karmazin.
The outlook for the second half remains strong, Mr. Karmazin said, with radio expected to continue to improve, and strong upfront sales promising high ad revenue in the latter part of the year. Mr. Karmazin noted third-quarter scatter prices are running 30% to 40% over the upfront and Viacom's total upfront revenue -- including network, cable and syndication -- was 19% above last year's TV ad-buying season. He added Viacom is "bullish" about upfront holds turning into orders in August.
"We are not seeing anything that troubles us about the aggressiveness of the upfront," he said.