Earnings: Viacom 3Q Profit Drops 16 Percent: Dooley New CFO; $500 Million Digital Rev In 2007?


Today’s earnings report from Viacom is the first for Philippe Dauman as CEO but it primarily covers work on former CEO Tom Freston’s watch since the switch occurred just after Labor Day. … Viacom’s 3Q profit fell 16 percent as declines in the entertainment business offset gains from its cable networks. Net income was $356.8 million, or 50 cents, compared with $423.3 million, or 56 cents, a year earlier. Revenue rose 7 percent to $2.66 billion. Profit beat Wall Street estimates of 48 cent profit on sales of $2.63 billion, according to Thomson Financial. Viacom also announced the year-end departure of CFO Michael Dolan ; he will be replaced by Thomas Dooley, who came in with Dauman as chief administrative officer.
Highlights from the quarter:
–Cable Networks revenue jumped 10 percent to $1.84 billion; the unit’s advertising revenue rose 7 percent to $1.09 billion while affliate fees increased 12 percent to $510.4 million. Operating income rose 14 percent to $777.7 million.
— Entertainment revenue rose 1 percent to $856.5 million, while the unit posted a loss of $6.7 million.
More later from the conference call, where online strategy was discussed in more detail. One moment that stood out: Dauman’s insistence that Viacom can hit $500 million in digital revenue in 2007 — a year ahead of schedule.
Bloomberg:Aryeh Bourkoff, analyst, UBS: “The numbers are solid, but investors would like to see them buy back more stock, make a digital acquisition and sustain double-digit growth of cable networks.”
Earnings release|presentation slides|Conference Call (replay)

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