Company’s DVD, Blu-Ray sales, cost-cutting help offset advertising slide
Viacom said on Thursday that DVD and Blu-Ray disc sales from “Star Trek,” “Transformers 2” and “G.I. Joe” helped trigger a huge boost in fourth quarter profit.
The company reported a net profit of $694 million during the period, compared with $173 million in 2008.
Overall, revenue fell 3 percent to $4.1 billion, including a 1 percent decline in its filmed entertainment division. The revenue slide was mainly to slumping sales of “Rock Band.”
Revenue at Viacom’s media division fell more than 6 percent.
But cost-cutting and a strong performance in its home entertainment division – a.k.a DVDs – helped offset the continued decline in the advertising market.
Viacom said its advertising revenues fell 3 percent overall, 4 percent in the U.S.
For the quarter, Viacom’s filmed enterainment revenues declined 1 percent to $1.79 billion, including a 73 percent slide in theatrical revenues (which the company attributed to a “difficult comparison with the number and mix of films” released the same time last year).
For the year, however, profit at Viacom’s filmed entertainment group grew to $236 million from $88 million in 2008.
“Paranormal Activity” also helped boost Viacom’s operating incoming 24 percent during the fourth quarter, the company said.
Sumner Redstone, Viacom’s chairman, said that "despite the economic challenges, we performed extremely well across our media networks and motion picture operations."
Philippe Dauman, Viacom's president and chief executive, praised Paramount Pictures for boosting profitability as “the studio's strategy of producing a smaller slate of films, anchored by franchises, began to pick up momentum."
Dauman said the company is pleased about a "strong" 2010 slate of films, including the upcoming premiere of Martin Scorsese's "Shutter Island."
Viacom joined News Corp., Time Warner and Disney in reporting strong fiscal results — a hopeful sign for the battered media business.