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Viacom Reports Higher Profits in Second Quarter

Viacom reported higher earnings in its fiscal second
quarter, with its media networks turning single-digit revenue increases into
double-digit gains in operating income.

Net income was $585 million or $1.07 a share, up 56% from
$376 million, or 63 cents a share, a year ago.

Revenues rose 2% to $3.3 billion.

 "In the second
quarter, Viacom continued its steady growth and delivered notably higher
profitability, driven by relentless investment in our exceptional brands, and
an ongoing focus on operational excellence," CEO Philippe Dauman said in a
statement. "Driven by our popular programming, Viacom's media networks are also
forging new and lucrative opportunities in digital distribution, while
continuing to create increasing value with our traditional affiliate partners."

Viacom's Media Networks group, which includes MTV,
Nickelodeon and Comedy Central, reported operating income of $893 million, up
11% from a year ago. Revenues were up 5% to $2.19 billion as domestic affiliate
revenues increased 15% and worldwide affiliate revenues grew 17%. Those gains
were offset by a decrease in ancillary revenues.

Advertising sales did not grow as fast, with domestic ad
revenues up 1% and worldwide ad revenues flat.  

Ratings were down 19% at MTV among adults 18 to 34 and
Nickelodeons viewership issues continued with ratings down 27% among kids 6 to
11. In the fourth quarter, a sudden drop in kids viewing meant providing
make-good ads to sponsors cutting into ad sales during the key holiday season.