Viacom 1Q Report

Viacom Inc., the media conglomerate that owns MTV, VH1 and Paramount Pictures, saw a 9 percent decline in its first quarter earnings as debt mounted to pay for an acquisition and share buybacks, the company reported May 11th.

Viacom, which separated from CBS Corp. at the beginning of the year, earned $317.2 million, or 43 cents a share, in the three months ending in March versus $350.3 million, or 47 cents per share, in the same period a year ago.

Revenues rose 12 percent to $2.37 billion, of which 8 percent was attributable to the acquisition of Dreamworks SKG, an entertainment company founded by Steven Spielberg, David Geffen and Jeffrey Katzenberg.

Viacom executives said the DreamWorks acquisition bumped its entertainment unit’s revenue by 25 percent during the quarter to $824.9 million, according to the Los Angeles Times. Operating income for the unit, however, dropped 28 percent, to $51.1 million.

In addition to the DreamWorks deal announced in December, which was worth $1.6 billion in cash and debt, Viacom bought back $982 million of its own stock during the quarter. As of March 31st, Viacom’s outstanding debt was $7.8 billion.

On an operating basis, before interest payments, taxes and other factors, earnings rose 3 percent to $623.5 million from a comparable figure of $602.7 million in the same period a year ago.