Viacom Inc. , parent of MTV and Comedy Central, on Friday reported a bigger-than-expected increase in quarterly profit on strong growth in cable advertising and licensing of TV shows to online sites like Netflix and Hulu.

Excluding special items, Viacom earned 99 cents per share in its fiscal third quarter, exceeding analysts' average estimate of 86 cents per share, according to Thomson Reuters I/B/E/S.

Revenue in the quarter, ended June 30, rose 15 percent to $3.77 billion, ahead of the $3.52 billion expected by analysts.

Advertising revenue at its cable networks rose 14 percent to $1.28 billion, while revenue at its affiliates increased by nearly one-fifth to $971 million, boosted by higher digital distribution revenue as well as rate increases to cable and satellite partners.

While healthy advertising growth has been a common feature of the big media companies' results in the quarter, digital licensing of TV shows to online partners has been another significant driver of profits.

Viacom struck a new deal with Hulu in February and expanded an existing agreement with Netflix in May, helping to boost its bottom line with one-time licensing fees. A similar effect was seen at Time Warner Inc and CBS Corp .

Digital distribution is going to be important for all media players and there's still upside to come from this, said David Joyce, analyst at Miller Tabak.

At Viacom's filmed entertainment unit. Paramount Pictures, revenue grew 13 percent to $1.41 billion on the back of higher TV license fees for movies and DVD sales. But movie box office revenue dropped 9 percent as titles Thor, Super 8 and Kung Fu Panda fell short of what Viacom had hoped.

(Reporting by Yinka Adegoke; additional reporting by Franklin Paul; Editing by Derek Caney and Steve Orlofsky)

Viacom Ads