Viacom Cable Networks Boost Profit

NEW YORK —Viacom’s second-quarter earnings
jumped on increased profits from its
media networks, exceeding analysts’ expectations.

The company said it expected ad sales to
remain strong next quarter and that it is planning
some changes in the way it sells commercial
time to monetize ratings increases at
some of its networks.

Net earnings were $376 million, or 63 cents
per share, up 53% from $245 million, or 40
cents a share, in last year’s second quarter.

Revenue rose 20% to $3.3 billion.

“The investments we’ve made in the
research and programming over the past
several years are paying off in the form of
strengthened brands and hit programming that are attracting growing audiences
in the U.S. and around the globe,” CEO Philippe Dauman said during
the company’s earnings conference call with analysts last week.

Operating income for Viacom’s media-networks group, which includes MTV,
Nickelodeon and Comedy Central, rose 13% to $806 million. Programming
expenses rose 8%. Tom Dooley, Viacom’s chief operating officer, said he expected
programming expenses to grow between 7.5% and 8% for the full year.

Revenue for the media-networks unit was up 11% to $2.1 billion, reflecting
a 12% increase in advertising revenues. Domestic ad sales were up 11%,
reflecting last year’s strong upfront and higher rates in the scatter market.
Affiliate revenue grew 9% to $851 million. Ancillary revenue was up 10%, to
$155 million mainly because of TV syndication sales and consumer-product

— Jon Lafayette, Broadcasting & Cable

Ad Sales Boost Discovery Earnings

SILVER SPRING, MD. — Discovery Communications said its profits rose as the
media and advertising business continued its recovery.

Net income rose 80% to $305 million,
or 74 cents a share, from $169 million,
or 39 cents a share. The earnings include
a $102 million gain from contributing its
Discovery Health network to the OWN:
the Oprah Winfrey Network joint venture.
Without one-time gains, earnings were up

Revenue rose 9% to $951 million.

At Discovery’s U.S. networks, revenue
was up 8% to $587 million, with ad revenue
up 9% to $290 million and distribution
revenue up 6% to $274 million. Revenue at
the international networks was up 14%, to
$323 million.

The company said that the advertisingrevenue
gains reflected increased prices and
higher sellouts, but were offset by $14 million
in revenues from Discovery Health, now
a part of the OWN joint venture.

Meanwhile, Discovery expects to pump more money into OWN. It has already
invested $215 million in the channel, including $57 million in the first

“The ratings have … been below our expectations and so we’ve been
digging in,” said Discovery CEO David Zaslav. “We’re focused on, what
does the audience want from OWN? We’re optimistic that the ratings at
OWN will build through 2011, with 21 new series set to debut.”

— Jon Lafayette, Broadcasting & Cable