VIACOM SECOND QUARTER UP, BUT WHO’S ACCOUNTING?

Viacom’s second-quarter earnings were almost enough to make Sumner Redstone and Mel Karmazin kiss and make up.

The feuding moguls buried the hatchet long enough to announce Q2 net earnings of $546.5 million, or 31 cents a share, for the three months ending June 30, vs. $16.7 million, or 1 cent a share, in a comparable period last year.

Last year’s results include goodwill amortization, which is no longer applicable under new accounting standards, and no, they weren’t compiled by Arthur Andersen. Excluding that, the year-ago earnings would have been $524 million, or 29 cents a share, meaning underlying earnings only rose 4% from a year ago.

Still, it was enough to celebrate, as the results were higher than the 29 cents per share predicted by Wall Street pundits. Viacom stock was up $1.91, nearly 6%, to $36.35, in trading on the New York Stock Exchange.

Karmazin, the company President and COO, said the company was seeing "very strong growth" in its main businesses of TV, cable and radio, thanks to "strong advertising momentum and Ozzy Osbourne's charisma." He and Redstone then took several potshots at rival AOLTW, which announced yesterday the SEC would be investigating some of its accounting practices. Maybe they forget to eliminate the goodwill amortization.

"While others are starting over, we’re ready for the second act," claimed Redstone, who excused himself to film his part in VH1’s recently announced Liza Minnelli/David Gest reality series.

Meanwhile, that wacky Mel told investors on a conference call he was wearing a T-shirt that read, "We will not do anything stupid."

Viacom revenues rose 2% to $5.85 billion from $5.72 billion. For the first six months of 2002, Viacom posted a net loss of $567 million, or 32 cents a share, including a charge of $1.5 billion to write down goodwill as the company adopted the new accounting procedures. Year-ago earnings were $9.4 million, or 1 cent a share. First-half revenues edged up to $11.52 billion from $11.47 billion.