[ Tuesday ]
Viacom Sees Likely Blockbuster Spin-Off
Tue February 10, 2004 07:24 AM ET
NEW YORK (Reuters) - Viacom Inc. (VIAb.N: Quote, Profile, Research) , which has been seeking for months to sell its controlling stake in Blockbuster Inc., on Tuesday said it expects instead to spin off its holding in the money-losing video rental chain.
Viacom, which also reported a quarterly loss, said it expects to divest its 81 percent interest in Blockbuster in a tax-free spin-off, and sees it completed by mid-2004. It said it would continue to seek other alternatives.
Viacom, owner of the CBS television network, Paramount Studios and MTV Networks, reported a fourth-quarter loss of $385.4 million, or 22 cents per share. The loss included an accounting charge of $1.3 billion, or 58 cents a share, to write down goodwill of Blockbuster and other assets and on weakness at its Infinity radio unit and television business.
The loss compared with a profit of $652 million, or 37 cents a share, in the year earlier period.
Revenue rose 11 percent to $7.5 billion in the fourth quarter, from $6.8 billion a year earlier.
Excluding the charge, the company reported a profit of 36 cents a share, matching Wall Street estimates of 36 cents a share profit, according to Reuters Research, a unit of Reuters Group Plc.
The company has been hamstrung by its stake in Blockbuster Video as the video rental chain battles lower priced competitors and DVD sales.
Looking ahead the company backed earlier full-year 2004 financial forecasts calling for revenue growth of 5 percent to 7 percent. Excluding the non-cash charge related to Blockbuster, operating income is expected to rise 12 percent to 14 percent over 2003 levels.
Earnings per share are expected to grow 13 percent to 15 percent in 2004.
MM [06:24]
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