What, me worry?

Strong second half will push earnings up, says Karmazin

Just wait 'til the second half. That was Viacom President Mel Karmazin's message to Wall Street last Wednesday when the company released its fourth-quarter earnings. Karmazin's outlook for 2001: Look for a major turnaround in the second half that will boost Viacom's annual pre-tax earnings at least 20%, to $6 billion.

But that's the future. The immediate past and present aren't quite so rosy. Pro forma TV revenue for Viacom was down in the fourth quarter, and TV growth will be "modest" in the first quarter.

Revenue in Viacom's television division (CBS, UPN, the owned stations and syndication) fell 4% on a pro forma basis in fourth quarter 2000, to $1.94 billion. But the cable networks posted an 11% revenue gain, to $1.2 billion, while revenue of radio/outdoor unit 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 2000, television revenue climbed 3%, to $7.25 billion, with pre-tax 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%. Infinity revenue rose 13%, to $4 billion, with a 19% rise in pre-tax earnings, to $1.8 billion. Company fourth-quarter revenue was up 5%.