UPDATE 4-Ad sales show life, aiding Viacom and IPG results

* Viacom EPS 40 cents vs Wall St. view 38 cents

* Viacom posts first adv sales rise since Q2 2008

* Interpublic organic revenue up nearly 3 pct

* Viacom shares up 2 pct, Interpublic up 3 pct
(Rewrites first sentence, adds Interpublic results, exec
comments)

By Jennifer Saba and Paul Thomasch

NEW YORK, April 29 (BestGrowthStock) – Viacom Inc (VIAb.N: ) and
Interpublic Group (IPG.N: ) offered the clearest signs yet that
the advertising market is recovering, reporting quarterly
results on Thursday that showed automakers, banks and retailers
are finally ratcheting up marketing budgets.

Analysts said the results should help put to rest questions
over whether the run-up in media stocks — up 12 percent this
year — has been smart investing or wishful thinking. Until
now, there has been scant evidence that spending on advertising
campaigns has increased at all from its lows.

At Viacom, which owns the MTV and Nickelodeon cable
channels and Paramount film studio, advertising sales rose 3
percent worldwide and 1 percent in the United States. It was
the first increase in ad sales in nearly two years.

“These numbers were very good, very solid,” said Alan
Gould, an analyst with Soleil-Gould Research Corp. “The single
most important number in there was domestic advertising. It
looks like they are finally turning the corner.”

Viacom Chief Executive Philippe Dauman said he expected the
recovery to continue over the coming months, and pointed to
increased spending by retail, technology, and toy companies on
TV campaigns.

“The overall mood of our clients is increasingly optimistic
and marketing budgets are beginning to loosen up,” Dauman said
on a conference call.

Viacom shares rose 2 percent after its first-quarter
results, which showed a better-than-expected rise in earnings
to $243 million, or 40 cents a share. Revenue fell 4 percent,
largely due to results from its film studio, which released
fewer movies and struggled with depressed DVD sales.

Interpublic Group, home to ad agencies like McCann
Worldgroup, narrowed its quarterly loss to $71.5 million, or 15
cents a share. Organic revenue, a closely watched benchmark,
rose 3 percent in the United States, a major turnaround from
last year’s consistently steep declines.

Interpublic said it had brought on more staff in the first
quarter, seen a rebound in spending by financial services
clients, and now expected worldwide organic revenue to be flat
to slightly positive this year.

Chief Executive Michael Roth said the results “support our
belief that the broader economic conditions have stabilized,
and we’ll keep seeing progress as we move through 2010.
Importantly, revenue performance improved as the quarter
unfolded.”

Interpublic shares were up 2.8 percent, and are now up
nearly 28 percent this year, indicative of the broader rally in
media stocks. Indeed, Viacom, News Corp (NWSA.O: ), Time Warner
Inc.(TWX.N: ), Walt Disney Co. (DIS.N: ) and CBS Corp (CBS.N: ) have
all far outpaced the broader Standard & Poor’s 500 this year.

Signaling its confidence in business, Viacom said its board
would meet over the next few months to determine an appropriate
program to return cash to its investors. That could be through
a dividend or a stock buyback program, which Viacom suspended
in the fall of 2008.

It has been a painful time for media companies walloped for
the past two years by the economic downtown and nervous
advertisers who froze spending.

“Just one year ago we found ourselves operating in a very
different and a very difficult environment,” Viacom Executive
Chairman Sumner Redstone said on Thursday’s call. “There is
unfortunately not a great deal of good news to be found and
even I had to reach into my reserve stores of optimism to find
a few bright spots on the horizon.”

This quarter’s revenue upside comes against easy
comparisons from a year-ago. Also, whether Viacom’s media
rivals have also boosted ad sales will not be clear until they
report results over the next couple of weeks.

The initial thaw of ad revenue comes just as media
companies are preparing for the biggest TV ad selling weeks of
the year, known as the upfronts.

David Bank, an analyst with RBC Capital Markets, thinks the
sellers will have the upper hand this season. “It’s going to be
fast and robust.”

Stock Trading

(Editing by Lisa Von Ahn, Derek Caney and Matthew Lewis)

UPDATE 4-Ad sales show life, aiding Viacom and IPG results