• by Wayne Friedman , November 2, 2005

Viacom's cable network revenues and big "War of the Worlds" box office results reversed the fortunes of the media company in the third quarter, posting $708.5 million. That's a major swing from the $488 million loss of the third quarter a year ago.

Viacom said cable TV network revenues from MTV, Nickelodeon, and BET increased 15 percent--improving to $1.7 billion from $1.4 billion. A good chunk comes from affiliate fees increasing 10 percent, and a smaller piece comes from advertising sales. Viacom's overall revenue climbed 10 percent to $5.94 billion.

All this bolsters Chairman Sumner Redstone's argument that Viacom will thrive under its plan to split the company into two--the new Viacom, one based around its rapidly growing cable networks such as MTV Networks, and CBS Corp., focused around the slower-growing CBS network and its TV and radio stations.

Said Redstone in the statement: "The significant strengths of 'new' Viacom to deliver consistent double-digit bottom-line growth and the proven cash generation ability of CBS Corp. will underpin their performance and define their attractiveness to investors in the future."

All that could be down the line. The CBS part of the company suffered this past third quarter because of lower advertising sales going to its TV stations, which declined 2 percent during the period. Viacom stock closed up 1.9 percent to $31.55 yesterday--only a bit higher than its 52-week low that hit last week at $29.93.

While the movie industry's overall box office revenues have been suffering, Viacom's film unit, Paramount, significantly improved its position recently--rising to the number one studio in the summer, primarily because of its top-draw summer hit, "War of the Worlds." From all this, as well as domestic home-entertainment and worldwide pay-television contributions, Viacom's entertainment revenues shot up 54 percent to $845 million.