Viacom 4Q earnings fall

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Pro forma TV revenue for Viacom was down in the fourth quarter and TV growth will be "modest" in the first quarter, but company president and chief operating officer Mel Karmazin stood by his earlier prediction that Viacom would grow its earnings by at least 20% in 2001-with strong gains later in the year.

Revenue in Viacom's television division (CBS, UPN, the owned stations and syndication) fell 4% on a pro forma basis in the fourth quarter, to $1.94 billion, the company reported Wednesday (Feb. 14). But the cable networks posted an 11% revenue gain, to $1.2 billion, while Infinity climbed 6% to almost $1.1 billion in the quarter. Pre-tax earnings at the TV division were up 14% to $310 million. The cable networks' pre-tax earnings rose 16% to $475.5 million and Infinity's pre-tax earnings climbed 10% to $489.6 million. For the full year, television division revenues climbed 3% to $7.25 billion with pretax earnings of $1.3 billion, up 40%; cable network revenues climbed 13% to almost $4.1 billion, with pre-tax earnings of $1.6 billion, up 21%, and Infinity revenues rose 13% to $4 billion, on a 19% rise in pre-tax earnings to $1.8 billion.

Viacom reported a 43% drop in net earnings - excluding a charge relating to internet investments - to $76 million in the fourth quarter of 2000.

The decline was mostly due to costs related to the CBS merger, the company. Pro forma fourth quarter revenue was up 5% overall, while pre-tax earnings climbed 17% to $1.3 billion.

Mel Karmazin told analysts that pre-tax earnings for the company would grow at least 20% in 2001, to more than $6 billion. And that doesn't include results from the recently acquired BET network, he said. The first half of this year will be tough going, he said, due largely to the tough comparisons to the first half of 2000, which reaped huge gains before the bottom fell out of the dot-com sector.
- Steve McClellan

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