UPDATE, 7:10 AM: CEO Philippe Dauman told analysts that he’s surprised by the attention being paid to the Paramount arrangement with DreamWorks Animation that ends next year. Still, he says that his studio is “proceeding on the operating assumption that we will not be extending” the deal. He doesn’t rule out a renewal but says that Viacom’s film unit is greenlighting and slotting its own computer-animated films with plans for one each year beginning in 2014. “Paramount will do just fine under any scenario and DreamWorks Animation will do just fine,” Dauman says, adding that talk of friction between the companies “is a fantasy.”

Analysts mostly wanted to know about Viacom’s plans to sell content to digital services such as Netflix. Dauman says he’s in “a number of discussions right now,” emphasizing that many of these conversations involve overseas companies. “You will see more of these deals — not just with Netflix, but with other players.” They like the fact that young people watch Viacom’s clips, shows, and movies. Although the deals typically last about two years, with all of the competition in digital streaming Dauman says it “should be easy to achieve” at least high-single-digit revenue growth from program licensing for the foreseeable future. Dauman says that Viacom’s profit margin on the deals is “over 75%.” The CEO wouldn’t say whether he might license an entire channel to a digital service. “I don’t like to deal with hypotheticals or negotiate in public.” But he adds that the company is “open to different models” that don’t cannibalize sales in other markets. He notes that Viacom research shows that people who watch online clips from Comedy Central’s The Daily Show and The Colbert Report often end up watching the shows on cable.

For those keeping track, chairman Sumner Redstone didn’t open the session with analysts by calling Dauman a “genius” — the term he had previously used for the CEO, and trotted out again this week when he introduced CBS’ Les Moonves. Redstone now calls Dauman “one of the wisest — if not the wisest — man I have ever met.”

Viacom shares are up about 1% in early trading.

This too shall
3 years
He does have a point even though it's a bit bitter. I do agree with his assessment...
an observer
3 years
wow buddy -- you sure have some ax to grind -- wondering if you got laid off...
Truth-o-Meter
3 years
But, wait...I thought the studios weren't making any money off digital distribution? That's what they told ME,...

PREVIOUS, 4:10 AM: The media giant benefited from strong ad sales at its cable networks as well higher TV license fees. The company reports 2Q net profits of $574M, up 32.8% vs the same period last year, on revenues of $3.77B, up 15%. Earnings at 97 cents a share handily beat the 86 cents consensus expectation among analysts who follow the company. They also were too conservative with their revenue forecast of $3.52B. The media networks unit’s revenues were up 16% to $2.39B. It was helped by the higher fees paid by cable and satellite companies as well as 12% growth in domestic ad sales. Filmed entertainment revenues were up 13% to $1.41B — but improving license fees for TV shows and home video sales outweighed a 9% drop to $588M from theatrical releases. Viacom says that Paramount was helped in last year’s 2Q by DreamWorks Animation’s How to Train Your Dragon and hurt this year by the late June release of Transformers: Dark of the Moon. The timing meant that Viacom had to include the costs of the film in this quarterly report, although most of the revenues will be reported in 3Q. CEO Philippe Dauman says that “Viacom is in the best financial shape in its history and has furthered its commitment to return cash to our shareholders with the recent increase in our dividend and the acceleration of our stock buyback program.”