Viacom profit up on cable,"Transformers"
Viacom Inc said on Friday its quarterly profit rose 80 percent, boosted by the sale of its music publishing unit, strong cable advertising and blockbuster turnout for the alien robots movie "Transformers."

The results beat Wall Street forecasts, and Viacom's Class B shares ended three percent higher at $41.58 in a generally flat market.

The company, home to the MTV Networks cable television channels and the Paramount film studios, also said it expects U.S. advertising sales to increase further in the current quarter and its digital entertainment outlets to post continued growth.

"'Transformers' gave the movie studio the lift, and the cable networks continued to improve in revenue growth," said Gabelli & Co analyst Christopher Marangi.

Viacom's third-quarter profit rose to $641.6 million, or 96 cents per share, from $356.8 million, or 50 cents per share, a year ago. The company recorded a $192 million gain for selling its Famous Music publishing unit in July.

Excluding the sale and other items, earnings per share for the 2007 quarter was 65 cents, above the average analysts' view of 60 cents per share, according to Reuters Estimates.

Revenue rose 24 percent to $3.27 billion. Analysts had forecast revenue of $3 billion.

The company also said it was on track to post low double-digit annual growth in diluted earnings per share from continuing operations.

Viacom founder and Chairman Sumner Redstone said he was "more than pleased" with the results and gave a strong endorsement to Chief Executive Philippe Dauman, who took the helm after company veteran Tom Freston was ousted.

The 84-year-old media mogul is embroiled in a public battle with his daughter Shari, once seen as his likely successor.

"One of the smartest moves that I and the board have ever made was to ask Philippe Dauman to assume the role of CEO," Redstone said. "The rewards of that decision are becoming more and more apparent."

A STRIKE FOR STEWART?

The company has prepared for a possible strike by Hollywood screenwriters after their labor contract with production studios expired, but expects little or no impact on Viacom's business, Dauman said.

But two of Viacom's most popular comedy shows -- "The Daily Show with Jon Stewart" and "The Colbert Report" -- could be hurt by a walkout as they rely on fresh writing about current events, he said.

Viacom's media networks business posted a 9 percent rise in revenue to $2 billion in the third quarter. Filmed entertainment revenue 57 percent to $1.3 billion.

Worldwide advertising rose 7 percent to $1.18 billion. Domestic ad sales grew 5 percent and the company expects comparable growth in the fourth quarter.

Viacom, which is also home to the Nickelodeon and Comedy Central cable channels, has sought to extend its entertainment brands more broadly across the Internet.

Viacom did not give details on results for its digital media businesses, but it has said in the past it would likely exceed a goal of $500 million in digital revenue for 2007.

Dauman said it would be increasingly difficult to break out digital results as the company sells more of that advertising in combined deals with its television programming.

"As far as digital advertising goes, we are experiencing nice growth in our efforts, particularly as we add sites, add functionality," Dauman told a conference call with analysts.

Analysts said the company should continue to post growth despite concerns over the impact of a deteriorating housing market on the U.S. economy.

"One of the variables is the overall ad environment, but they should fare relatively well given the dual revenue stream and the international (business)," said Marangi.

Reuters