MEDIA conglomerate Viacom Inc saw third-quarter profits fall 37 percent from a year ago as film studio Paramount Pictures' theatrical revenue fell more than a third and advertising revenue also declined, worsened by lackluster ratings at MTV.
Net earnings fell to US$401 million, or 65 cents per share, down from US$641 million, or 96 cents per share a year ago. There was an operating loss of US$19 million in "filmed entertainment," which includes Paramount, compared with an operating profit of US$72 million in third-quarter 2007.
Among Paramount's theatrical bombs in the third quarter were the Mike Myers comedy "Love Guru," which came out in late June, and "Ghost Town" with Ricky Gervais.
Viacom Chairman Sumner Redstone ?? who sold US$233 million worth of Viacom and CBS shares held by his National Amusements holding company last month ?? repeated a pledge he made last week not to sell any more. He sold the shares to stay in compliance with loan agreements at National Amusements.
"This was an extraordinary action brought on by an unprecedented situation and let me assure you of one thing," Redstone said. "National does not intend to sell one more share of stock in Viacom or CBS."
Viacom's revenue rose 4 percent to US$3.4 billion in the third quarter, while adjusted earnings from continuing operations fell 15 percent to 55 cents per share.
Shares rose 27 cents, or 1.3 percent, to US$21.35 in aftermarket trading, after dropping 37 cents to US$21.08 in the regular session before the earnings were announced.
Chief Executive Philippe Dauman said the company had moved to pare six movies from its annual film program to a maximum of 20, and said it would save US$50 million a year by parting ways with Steven Spielberg's DreamWorks SKG.
Dauman said the strategy would allow the studio to compete "more effectively in a crowded marketplace."
Viacom blamed the poor movie performance on comparisons to last year's successful "Transformers."
Overall film revenue was flat at US$1.3 billion.
While theatrical revenue fell 36 percent to US$312 million, home entertainment revenue rose 30 percent to bring in US$593 million and TV license fees rose 16 percent to US$342 million.