(Reuters) - Viacom Inc VIAB.O, the owner of MTV, Nickelodeon and Comedy Central cable networks, beat analysts’ estimates for quarterly profit on Thursday as domestic advertising revenue grew.
Shares rose 2.54% to $22.61 in morning trading after the company reported a 6% rise in domestic ad revenue on a constant currency basis, boosted by advanced tools.
Revenue from its filmed entertainment division, which includes Paramount Pictures, fell 14%.
Viacom and CBS Corp CBS.N — both controlled by Sumner and Shari Redstone’s National Amusements Inc. — said in August they would merge to compete against Netflix Inc (NFLX.O), Walt Disney Co (DIS.N), Apple Inc (AAPL.O) and other media and technology giants.
The companies expect to close the merger by early December. They announced new digital and content leaders for the combined entity earlier this month.
Viacom Chief Executive Bob Bakish will lead the combined company, ViacomCBS Inc., as president and CEO. CBS Corp. acting Chief Executive Officer Joe Ianniello will become Chairman and CEO of CBS.
In addition to distributing its own films and TV shows, Viacom is also producing content for streaming services including Apple Inc’s Apple TV+, Walt Disney Co-controlled Hulu and AT&T’s (T.N) HBO Max.
“Demand for content from third parties is incredible,” CEO Bakish said on Viacom’s earnings call. “And the combination of our assets and capabilities, with the fact that some of our competitors are pulling back, makes this sector an enormous opportunity for ViacomCBS.”
Earlier this week, Viacom announced a multi-year deal with Netflix Inc, for which it will produce animated TV shows and features based on new and existing Nickelodeon characters. It licensed “South Park” streaming rights to HBO Max, among its other deals.
Net earnings from continuing operations attributable to Viacom fell to $303 million (£236.8 million), or 75 cents per share, in the fourth quarter ended Sept. 30 from $386 million, or 96 cents per share, a year earlier.
Total revenue fell to $3.43 billion from $3.49 billion, but was above the average estimate of $3.41 billion, according to IBES data from Refinitiv.
Excluding items, the company earned 79 cents per share, above the average analyst estimate of 75 cents per share.
Reporting by Helen Coster in New York and Neha Malara in Bengaluru; Editing by Anil D'Silva and Bernadette Baum