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Viacom Beats Q4 Estimates

Ad Revenue Falls 4% In Period, But Company Expects Sequential Rise

Mike Reynolds -- Multichannel News, 2/11/2010 12:19:20 PM

Viacom CEO Philippe Dauman, coming off a 4% decline in domestic advertising sales in the fourth quarter, told analysts on a conference call Thursday that he expects the ad climate to improve in the first quarter of this year.

Ad sales fell for the sixth straight quarter for the media giant, home to MTV Networks, BET and Comedy Central. But Dauman said he was encouraged by strong ratings gains at MTV - which has landed hits in Jersey Shore and Teen Mom  - and its Nickelodeon kids' channel. Dauman said that in January, MTV had four of the top 10 original cable series in its target 12-to-34-year-old demo. Nickelodeon had the most-watched month in its history in January - more than 11 million viewers tuned in for one episode of tween series iCarly and the premiere of Big Time Rush was the biggest live-action debut in Nick history.

Dauman said that he expects improvement in ad sales in the first quarter, but stopped short of predicting they would cross into positive territory.
"It's still early in the first quarter," Dauman said on a conference call with analysts. "We were at minus 4% domestic ad sales in the fourth quarter, so a sequential improvement means we expect to be better than minus 4% in the first quarter of 2010. Beyond that we are not n the position to make any predictions."
Still, Dauman said that scatter pricing continues to be strong - he estimated it is up by double digit percentages over upfront pricing.
"The tone is clearly more positive," Dauman said.
For the period, Viacom's total revenue was down 3% to $4.1 billion and adjusted operating income up a strong 24% to $1.2 billion.
At its Media Networks division, which includes the cable channels, revenue was down 6% to $2.3 billion - primarily because of sluggish sales of its "Rock Band" video games and consoles - while operating cash flow rose 3% to $921 million. One bright spot was a double-digit percentage increase in affiliate fees, which Dauman said is expected to continue.

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