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By Allison Prang and Benjamin Mullin 

Viacom Inc. said it expects revenue to grow in the 2019 fiscal year as the company augments its pay-TV business with production and licensing fees from streaming-video services.

The cable-TV giant, which owns networks MTV and Nickelodeon, and Paramount Pictures, posted a 5% rise in revenue to $3.49 billion in the quarter ended Sept. 30. Analysts polled by Refinitiv were expecting $3.37 billion in revenue.

Viacom's Class B shares were up 4.5% in afternoon trading in New York.

Viacom has suffered a decline in its core cable business in recent years as younger viewers increasingly cancel their subscriptions and turn toward online video streaming platforms owned by Netflix Inc., Amazon.com Inc. and Alphabet Inc.'s Google -- a phenomenon called cord-cutting. The company has adapted to that shift in part by selling programming to those players in an attempt to capitalize on the growing demand for content.

In an earnings call, Viacom Chief Executive Bob Bakish drew a distinction between the company's current strategy of producing original content for streaming services and a previous approach of licensing the company's existing library to rivals like Netflix, which some analysts believe hastened the migration of viewers away from cable networks.

"Viacom has all the pieces to become a pre-eminent creator of multiplatform content for the world," Mr. Bakish said.

Net profit fell 42% to $394 million, or 98 cents a share, as the year-earlier period included a $127 million gain from the sale of broadcast spectrum. In addition, Viacom recorded an $111 million income tax expense in the latest period, compared with a $124 million benefit a year earlier.

Viacom said domestic affiliate revenues grew 3%, a sign of resiliency for its core cable business amid an industrywide slump triggered by cord-cutting. Although advertising declined 6% from the year-earlier period to $1.14 billion, the company said it is expecting domestic ad revenues to return to growth in the second half of 2019.

Another bright spot for Viacom was growth at film studio Paramount Pictures, which has undergone a financial turnaround since 2016, when it lost $445 million. The company said double-digit revenue growth helped propel Paramount Pictures to profitability for the third consecutive quarter, buoyed by the success of "Mission: Impossible -- Fallout" and "A Quiet Place.

Write to Allison Prang at allison.prang@wsj.com and Benjamin Mullin at Benjamin.Mullin@wsj.com

(END) Dow Jones Newswires

November 16, 2018 14:30 ET (19:30 GMT)

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