Viacom’s Infinity Radio Business Finishes Tough Quarter

Media giant Viacom posted a strong net gain for the first quarter of 2003, mostly due to increases in video and cable network business; its Infinity-branded radio business decreased.
Viacom registered a 7-percent gain in revenue and a 26-percent net increase over the first quarter of 2002. Revenue increased from $5.7 billion to $6.1 billion, and net earnings from $367 million to $462 million. The gains came on the heels of 14-percent growth in the company’s video segment and 13-percent growth in cable networks.
Infinity, the subsidiary responsible for radio and outdoor advertising business, saw mixed results. Radio revenue dropped 2 percent from $451 million in 2002 to $444 million in 2003, though the radio segment’s operating income increased slightly from $189.7 million to $190.6 million.
According to the company, its stations in the top 10 markets saw flat revenue, though revenue grew 6 percent in its other 30 markets.
Infinity’s outdoor segment increased 9 percent in revenue to $378 million, though operating income decreased from $25.6 million to $25.4 million. Viacom attributes the revenue increase to higher billboard revenues in North America and favorable exchange rates. Operating income decreased because of higher expenses in guaranteeing transit contracts and higher billboard rent.