Aug. 2 - Rising ratings at Nickelodeon and streaming deal with Amazon boost Viacom's earnings. And the media giant is doubling its share buyback. Fred Katayama reports.
Fixing Nickelodeon's ratings woes with new programs and new management paid off handsomely for Viacom. More young kids tuning into Nickelodeon's programs like Sam &Cat and SpongeBob SquarePants boosted ad revenues in the third quarter. That, along with its new multi-year streaming deal with Amazon helped drive operating profit up 20 percent. Viacom CEO Philippe Dauman said, "Domestic advertising revenue gains continued to accelerate at our Media Networks, as new, original programming drives improving ratings momentum." Those higher profits from TV programming offset the sharp income shrinkage from movies even though Viacom says its summer flicks "World War Z" and "Star Trek Into Darkness' succeeded at the box office. The result: gain in film revenue but pain in profit. One move sure to please shareholders: Viacom is doubling its share buyback to $20 billion, and it plans to repurchase an additional $2 billion over the next few months. RBC Capital Markets analyst David Bank said, "The struggling Nickelodeon platform and to a lesser extent MTV have turned .. this stock has the lowest multiple in the group and is now growing earnings at a faster pace than others." News of the buyback and the growth in advertising lifted its shares. Viacom's stock is up more than 40 percent this year, outperforming rivals Disney and Time Warner.