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NEW YORK — Media conglomerate Viacom Inc. said Thursday its first-quarter profit fell 34 percent, hurt by falling ad and entertainment revenue. But there are signs things may be easing.
Chief Executive Philippe Dauman in a conference call pointed to signs of an advertising turnaround, a critical factor for the company's cable properties.
"We are not seeing any further deterioration," he said. "Over the past few weeks we have seen the advertising market stabilize."
The New York-based company, which is controlled by Sumner Redstone and includes the Paramount movie studio as well as cable networks MTV and Comedy Central, said it earned $177 million, or 29 cents per share, down from $270 million, or 42 cents per share, last year.
That topped the average Wall Street forecast of 26 cents per share, according to a Thomson Reuters survey.
Revenue fell 7 percent to $2.9 billion from $3.1 billion, roughly in line with estimates. Viacom attributed 4 percent of the decline to a strengthening U.S. dollar.
The company said it slashed costs by $87 million during the quarter.
The industrywide advertising slump and falling ancillary revenues hit Viacom's media networks segment, which saw revenue fall 8 percent. Ancillary revenue, which includes sales of the music video game "Rock Band," dropped 37 percent. Domestic ad sales fell 9 percent while international ad revenue fell 11 percent.
Filmed entertainment revenue tumbled 5 percent to $1.1 billion, led by a 9 percent decline in home-entertainment sales, which the company blamed on a weak retail market. Theatrical revenue climbed 15 percent, reflecting strong domestic box office sales.
Viacom said the company cut its debt during the quarter to $7.4 billion from $8 billion at Dec. 31. Its cash balance fell to $259 million from $792 million.
The company's shares fell 90 cents, or 4.1 percent, to $20.84 in afternoon trading.
Meanwhile, Redstone, who controls Viacom as well as CBS Corp. through his holding company National Amusements Inc., told analysts he was pleased with "substantial preliminary interest" from bidders for some of National Amusements' assets. He offered few specifics, however.
With a huge debt burden, National Amusements is looking to raise $230 million to $280 million selling movie screens in the U.S. as well as other assets.
