Viacom Inc. on Thursday posted a quarterly profit, driven by advertising gains at MTV, "War of the Worlds" box office sales and "Lemony Snicket" DVDs.
The owner of Paramount movie studios and the CBS television network said its second-quarter net profit was unchanged at $753.8 million, but profit per share increased to 47 cents from 44 cents a year earlier because fewer shares were outstanding.
Net profit from continuing operations rose 6 percent to $762 million, or 47 cents, from $717 million, or 41 cents.
Second quarter 2004 results included results from rental company Blockbuster Inc., which it split off in late 2004, and $30 million in severance charges. Current quarter results include the recently sold Famous Players movie theater chain.
Revenue rose 10 percent to $5.9 billion, with profit per share and revenue ahead of analysts' estimates of $5.76 billion and 46 cents per share, according to Reuters Estimates.
Viacom earlier this year said it planned to spin off its high growth cable networks and film studio from its more mature television and radio networks by early next year.
"In the 21st century, large is no longer in charge," Sumner Redstone, chief executive of Viacom, who will remain as chairman after the split said on a conference call.
Company executives said more of the existing debt load will be portioned off to the slower growing new CBS company, with a lighter load at the new cable-oriented Viacom to allow it to pursue acquisitions in the Internet and digital markets.
The company said the anticipated debt to cash flow ratio at the new cable-oriented Viacom will be 1.5 to 2.0. The division is expected to increase that ratio to about 2.75 after the spin off.
Debt to cash flow ratio at the new CBS is expected to be higher, at around 2.5 to 3.0. That unit is expected to pay a regular dividend no less than the current Viacom's current annual payout of $450 million.
The company said it expects full year revenue to rise in the mid-single-digit percentage range and operating income to rise in the high single-digit percentage range. Expectations exclude one-time charges related to the company's anticipated spin off.