Profits at Viacom surged 37 percent during the third quarter, thanks to improved ad sales at its pay TV channels, the company announced on Friday.
The company beat analysts' expectations, posting profits of $574 million, or 97 cents a share, in the three-month period ending in June. That's up from $420 million, or 69 cents in net income Viacom logged a year earlier.
Revenues also exceeded projections, jumping 15 percent to $3.77 billion.
"Creativity, focus, discipline and resourcefulness. This is how we will grow," Viacom CEO Philippe Dauman said during a conference call with analysts after earnings were released.
"There is no question Viacom is at the top of its game and we're pushing the bar higher," he added.
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The media giant had the unenviable task of unveiling its bullish third quarter results in the shadow of one of the largest market downfalls since the financial collapse of 2008. But its robust financial picture did provide lift to Viacom's stock in trading Friday morning as shares rose nearly 5 percent to $46.29.
Choosing to accentuate the positive, the market's recent woes went unaddressed in the hour-long call with analysts.
Wall Street had expected Viacom to earn 86 cents per share on revenue of $3.52 billion, according to a poll of analysts conducted by Thomson Reuters.
Much of the growth was attributable to a 14 percent increase in ad revenues at the company's cable networks, such as Comedy Central and MTV, which rose to nearly $1.3 billion over the period.
The company’s film division, Paramount, saw its operating profit fall 20 percent from $69 million to $49 million. But revenues were up 13 percent to $1.4 billion thanks to home entertainment sales and hits such as "Super 8" and "Thor," the Marvel movie on which Paramount netted an 8 percent distribution fee.
The mega-grossing “Transformers: Dark of the Moon” opened in July, after the earnings period had ended. Dauman said that those revenues would appear in the company's fourth quarter results.
Viacom also benefitted from digital distribution pacts it signed with the likes of Hulu and Netflix, the company said.
Still, the company does face some potential challenges -- particularly on the film front.
Its deal to distribute Marvel films wraps up with last month’s release of “Captain America: The First Avenger,” and it seems increasingly likely that Paramount will part ways with DreamWorks Animation when its distribution pact wraps up in 2012.
Paramount announced that it will get into the cartoon game, launching its own animation division last month. On the call with analysts, Dauman made no secret that Paramount was positioning itself for life after DreamWorks.
"We are proceeding under the assumption that we will not be extending the DreamWorks Animation deal beyond next year," Dauman said.
The Viacom CEO did move to quash rumors that the distribution pact had soured because of unhappiness on the part of DreamWorks Animation chief Jeffrey Katzenberg over how Paramount was handling the roll out of its films.
"The only issue is what DreamWorks wants to do strategically after its deal expires," Dauman said.
Viacom said it repurchased 14.2 million shares for $700 million over the period. It has $2.18 billion remaining on its $4 billion stock buyback.