Earnings Cheat Sheet: Viacom’s ‘Jersey Shore’ Improves Profit Situation

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If Viacom’s (VIA) ‘Jersey Shore’ and Mike ‘The Situation’ are making millions, you could surely expect Viacom to see its bottom line benefit. Viacom is home to cable TV properties such as BET, MTV, Comedy Central and Nickelodeon. Today, the company reported it is selling the Rock Band music videogame developer it acquired in the past, Harmonix. Here’s your earnings cheat sheet to Viacom’s latest quarterly release:

Earnings: Earnings increased to $.75 a share, or $461 million,  from $.71 a share, or $432 million, in the same quarter last year, a 6% rise in profits.

Revenue: Revenue increased 5% to $3.33 Billion up from $3.17 Billion in the same quarter a year ago.

Actual versus Wall Street Expectations: Viacom earnings per share of $.75 per share was above the analyst consensus estimates of $.69 per share. Revenue beat at $30 million over $3.30 Billion expected (Thomson Reuters).

Notable Stats: On October 1, 2010, Viacom resumed share repurchases.  Viacom repurchased 4.3 million shares for an aggregate purchase price of $162 million.  As of November 10, 2010, Viacom had $3.84 billion remaining in its $4 billion stock repurchase program.

Viacom’s cash balances increased to $837 million at September 30, 2010 compared with $298 million at December 31, 2009.

Did You Hear That? Philippe Dauman, President and Chief Executive Officer of Viacom, said, “Investing in our content and our brands has been and will continue to be the cornerstone of Viacom’s strategy.  We never wavered from it even as we managed through the global recession.  As a result, many of our cable networks today are achieving new ratings highs and producing hit shows that feed the cultural dialogue in the U.S. and abroad.  This creative success coupled with the improving economy has fueled our advertising revenues, which were up 8% in the U.S. this quarter, our third consecutive quarter of sequential improvement.”

Commentary: Shares of Viacom hit a 52-week high today following a better-than-expected report. Since September, Viacom shares have been above the 50-day and 200-day moving averages. With a growth hit in ‘Jersey Shore’ and a spinoff of its fledgling video game developer, Harmonix, Viacom continues to position itself for improvement. Also, Viacom’s pay-TV channel Epix closed a deal with Netflix this quarter. Netflix agreed to pay $900 million over five years for online streaming rights to Epix’s more than 3,000 films. Viacom will need to continue more new media deals to remain on a solid growth track going forward.


Disclosure: No positions in Viacom shares

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