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Viacom profit rises on MTV and "Transformers"

By Kenneth Li Thu Feb 28, 7:33 PM ET

NEW YORK (Reuters) - Cable network and movie studio ownerViacom Inc said on Thursday fourth-quarter profit rose 16percent on higher advertising sales at its MTV Networks andstrong sales of its 'Rock Band' video game and "Transformers"DVDs. ADVERTISEMENT

For now, Viacom Chief Executive Philippe Dauman said he hasseen no impact on the company from a weaker economicenvironment, which some analysts expect to hurt overalladvertising spending.

Last year marked a turnaround for the company as ratings atits MTV Networks, Nickelodeon and BET cable networks rebounded,Paramount movies studio released hit titles and its burgeoningvideo games division booked big sales.

"The results have been greater efficiencies and a renewedurgency and effectiveness in everything we do," ViacomExecutive Chairman Sumner Redstone said on a conference call.

Viacom said it expects net profit from continuingoperations to grow in the low, double-digit percentage rangeevery year from 2008 through 2010.

The outlook, roughly on par with Wall Street expectations,was seen as "conservative" by Standard & Poor's analyst TunaAmobi. "There's upside in that guidance," he said. "The key isthe film division. It's the swing factor."

Viacom posted a net profit of $559.5 million, or 86 centsper share, up from $480.8 million, or 69 cents per share, ayear earlier.

Revenue rose 19 percent to $4.25 billion, beating analystexpectations of $4 billion in revenue.

Excluding items the company's profit of 84 cents beat WallStreet expectations of 82 cents, according to ReutersEstimates.

Global advertising revenue rose 9 percent to $1.39 billion.

Financial results were boosted by an 18 percent jump incable networks revenue and 19 percent rise in film studiosrevenue.

Dauman also said the company had reached its target ofexceeding $500 million in digital revenue for 2007. Viacomcurrently operates more than 300 online properties.

New businesses such as its growing video games division,which developed one of last holiday season's big sellers its"Rock Band" game, contributed $460 million, up 72 percent froma year ago.

Dauman said Viacom does not expect to compete with othervideo game companies in what appears to be another round ofconsolidation, following Electronic Arts Inc's unsolicited $1.9billion bid to buy "Grand Theft Auto" maker Take-TwoInteractive Software Inc.

Ahead of the financial report, Viacom shares closed down 60cents, or 1.43 percent, at $41.30 on the New York StockExchange. The stock has risen about 12 percent in the past sixmonths, outperforming CBS Corp's 23 percent drop.

Both companies are controlled by Redstone.

(Reporting by Kenneth Li; editing by Carol Bishopric)