UPDATE, 6:54 AM: Here’s how much the 20.4% viewing drop at Nickelodeon – or, as CEO Philippe Dauman euphemistically calls it, “previously disclosed ratings softness” — hurt Viacom in the last quarter of 2011: Without that decline, ad sales for the Media Networks unit would have been up for the quarter, instead of down 3%, he told analysts in a conference call. Dauman continues to characterize this as largely a problem with Nielsen’s measurements as opposed to Nick’s programming: “We believe there were some ratings systemic issues,” he says. “The set top box data in no way reflects what we see in the Nielsen measurements.” Still, he says that he’s “confident that as the year progresses you’ll see improvement in Nickelodeon’s ratings” as the network introduces more than 500 episodes of original shows. Viacom plans to spend $3B on programming for its networks this year.

Even with his Nick problems, Dauman told investors to expect “positive ad growth performance” in the current quarter, although he wouldn’t be specific. “We’re encouraged by the tone in the market.” The company says that payments from pay TV distributors will grow by high single digit to low double digit rates “for the foreseeable future.” Dauman also says that he’ll announce a new online partner next week.

As for Paramount, Dauman talked up G.I. Joe: Retaliation and plans to team up with Fox for the re-release of Titanic in 3D. But the CEO skated around a question about the progress in his negotiations with DreamWorks Animation as the agreement to have Paramount distribute its films approaches its expiration this year. “We have valued the relationship thus far,” Dauman said. He added that Dreamworks “is a successful company and a well-led company and I wish them great success as they move forward.”

Speaking of euphemisms, Chairman Sumner Redstone opened the session by calling Dauman “the wisest man I have ever met.”

PREVIOUS, 4:17 AM: Shares are down about 6.6% in pre-market trading after the company released a report that’s short on details for the last three months of 2011. Viacom generated net earnings of $591M, down 5% vs the period last year, on revenues of a little under $4B, up 3%. The revenue figure was about what analysts expected. Due to Viacom’s stock repurchase effort (16.2M shares in the quarter), earnings per share were up slightly to $1.06 — a penny ahead of forecasts. Revenue for the Media Networks was up 3% to $2.4B because the increase in payments from Pay TV companies for Viacom’s channels offset the 3% drop in advertising. Viacom attributes the ad decline to “lower ratings and softness in the U.S. advertising market.” The company is still grappling with the steep drop in viewership at Nickelodeon. Over at Paramount, revenues were up 4% to $1.5B. But without last year’s boost from the sale of distribution rights to two Marvel films, and with home video still declining, the unit had an operating loss of $31M, down from a $68M profit in the period last year. Always the optimist, CEO Philippe Dauman says the company delivered for shareholders “despite short term economic headwinds” adding that Viacom is “looking forward to our slate of films for the 2012 calendar year.”