Programmers Finish Q3 Strong

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Cable programmers closed out the earnings
season last week on a good note, with most reporting
ad-sales growth in line with analysts’ expectations and
fueling some optimism for continued strength in the advertising

Viacom, AMC Networks and The Walt Disney Co. all reported
quarterly earnings last week, with Disney (which
reports on a fiscalyear
basis) leading the
charge with strong revenue
and operatingincome
growth, bolstered
by strong performance
at its cable
networks and theme

Overall, revenue at
the media giant rose 7%
to $10.4 billion in the
fiscal fourth quarter
and operating income
was up 23% to $2.1 billion.
For the fiscal year,
total revenue rose 7% to
$40.9 billion, and operating
income increased
16% to $8.8 billion.

Disney’s cable networks,
including ESPN,
the Disney Channel and ABC Family, fueled most of that
growth, reporting an 11% boost in revenue in the fiscal
fourth quarter to $3.5 billion. Operating income at the
cable unit rose 18% to $1.3 billion. At its ABC broadcast
network, revenue rose 4% to $1.3 billion, while operating
income increased 37% to $201 million.

In a statement. Disney CEO Bob Iger said the results
“validate our strategic priorities and demonstrate we can
grow our earnings in the near term while continuing to invest
for long-term shareholder value.”

Disney’s Parks and Resorts segment also had a betterthan-
expected showing, bolstered by strong attendance at
its Hong Kong Disneyland Resort. Revenue at the unit rose
11% during the quarter, to $3.1 billion, and segment operating
income was up 33% to $421 million. For the year, revenue
rose 10% to $11.8 billion, and operating income rose
18% to $1.6 billion.

At Viacom — which said last Friday it would transfer
its stock listing from the New York Stock Exchange to
the NASDAQ on Dec. 1 — a glitch in the Nielsen ratings
marred what was in other respects a strong quarter for the
parent of MTV Networks. Domestic ad revenue at the company
was up 7% for the year, in line with analysts’ expectations
but missing its own double-digit targets. On a conference call
with analysts, Viacom CEO Philippe Dauman said an “inexplicable”
drop in viewership at its flagship Nickelodeon children’s
network in mid-September was the primary reason for
the fall off . The company is investigating the situation with
Nielsen and the Media Ratings Council, an independent auditing

Aside from the Nickelodeon glitch, Viacom (which also
follows a fiscal year) reported strong quarterly results —
revenue for its media networks rose 8% to $2.3 billion, and
operating income increased 10% to $958 million. Filmed
entertainment revenue, bolstered by box office receipts
from blockbuster Transformers: Dark Side of the Moon, increased
46% to $1.8 billion.

A season without new episodes of perennial Emmy favorite
Mad Men helped drive down ad sales at AMC Networks
in the third quarter, but profits inched higher.

Revenue at AMC, which includes the AMC cable channel,
We TV, IFC and the Sundance Channel, rose 4.6% to
$284 million and net income nearly doubled from $25 million
in the prior year to $40 million in the period.

Ad sales were flat, mainly because AMC only aired one new
original series in the period. New episodes of Mad Men will be
delayed until 2012 because of negotiations with series creator
Matt Weiner. On a conference call with analysts, AMC Networks
CEO Josh Sapan said the fourth quarter should be stronger
on the ad front, as new episodes of The Walking Dead and
new western Hell on Wheels will be included in the mix.