Blockbuster Charge Sinks Viacom’s 3Q10/28/2004 6:28 AM Eastern
A $1.5 billion charge related to Viacom Inc.’s split-off of Blockbuster Inc. dragged the company into the red for the third quarter.
Revenue at Viacom’s cable networks rose 14% to $1.7 billion from $1.5 billion in the year-earlier period, led by a 16% increase in advertising revenues. The ad-revenue gain was driven mainly by 17% growth at MTV Networks.
Cable-network affiliate fees grew 8% as increases at MTVN and Black Entertainment Television were partially offset by a 1% decline at Showtime Networks Inc., according to Viacom.
Ancillary revenues were up 33% over the third quarter of 2003, reflecting higher Nickelodeon consumer-product-licensing revenues, higher home-video revenues -- principally from Comedy Central’s Chappelle's Show DVD -- and higher foreign-syndication sales at Showtime.
Operating income at Viacom’s cable networks rose 13% to $691 million from $613 million in the previous-year quarter.
Viacom also announced that it would buy back up to $8 billion in class-A common stock and nonvoting class-B common stock from time to time, starting immediately.
And the company will increase its quarterly cash dividend on class-A and class-B common stock to 7 cents per share from 6 cents, payable Jan. 1 to stockholders of record at the close of business Nov. 30.
Viacom posted a companywide net loss of $487.6 million, or 28 cents per share, versus third-quarter-2003 net income of $699.6 million (40 cents). Without the Blockbuster charge, earnings from continuing operations rose 12% to $722.6 million from $647.9 million.
Companywide revenue rose 4% to $5.48 billion from $5.26 billion in the prior-year quarter.