Viacom profit beats on lower costs

(Reuters) - Viacom Inc, which is exploring a merger with CBS Corp, reported a quarterly profit that beat Wall Street estimates as it cut costs as part of a turnaround plan.

Viacom's controlling shareholder, Shari Redstone, has been urging CBS, which she also controls, to revisit a possible merger with Viacom.

Total expenses at New York-based Viacom fell 10 percent to $2.26 billion in the quarter, and provision for income taxes dropped 73.4 percent.

Viacom's advertising revenue rose 1 percent, while affiliate sales, or the fees it collects from cable TV operators and online distributors, fell 4 percent.

Sales at both units were in line with analysts' estimates, according to Thomson Reuters I/B/E/S.

 

Television ratings and ad revenue have taken a hit as fewer people are watching live TV and instead opting for on-demand video streaming services such as Netflix Inc and Amazon.com Inc's Amazon Prime.

CBS and Viacom said last week they had formed special committees to explore a merger, the first step in a potential reunion of the companies split by media mogul Sumner Redstone more than a decade ago.

A deal would pair CBS's broadcast network, television studios and Showtime cable network with Viacom's Paramount Pictures, Comedy Central, Nickelodeon and MTV.

Viacom's net profit increased to $535 million, or $1.33 per share, from $396 million, or $1.00 per share, a year earlier.

Excluding items, the company earned $1.03 per share, beating the average analyst estimate of 94 cents according to Thomson Reuters I/B/E/S.

Total revenue fell 7.6 percent to $3.07 billion, missing the estimate of $3.14 billion.

(Reporting by Muvija M in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)