COMPANY TOWN / ENTERTAINMENT EARNINGS

Media conglomerate Viacom Inc. said its first-quarter profit fell 34%, hurt by falling ad and entertainment revenue. But there are signs things may be easing.

Chief Executive Philippe Dauman during a conference call pointed to signs of an advertising turnaround, a crucial factor for the company’s cable properties.

“We are not seeing any further deterioration,” he said. “Over the past few weeks we have seen the advertising market stabilize.”

The New York company, which is controlled by Sumner Redstone and includes the Paramount movie studio as well as cable networks MTV and Comedy Central, said it earned $177 million, or 29 cents a share, down from $270 million, or 42 cents, last year.

That topped the average Wall Street forecast of 26 cents a share, according to a Thomson Reuters survey.

Revenue fell 7% to $2.9 billion, roughly in line with estimates.

The industrywide advertising slump and falling ancillary revenue hit Viacom’s media networks segment, which saw revenue fall 8%. Ancillary revenue, which includes sales of the music video game Rock Band, dropped 37%. Domestic ad sales fell 9%, while international ad revenue declined 11%.

Filmed entertainment revenue tumbled 5% to $1.1 billion, led by a 9% decline in home-entertainment sales, which the company blamed on a weak retail market. Theatrical revenue climbed 15%, reflecting strong domestic box-office sales.

Viacom said the company cut its debt during the quarter to $7.4 billion from $8 billion as of Dec. 31. Its cash balance fell to $259 million from $792 million.

The company’s shares fell $1.08, or 5%, to $20.66.

Redstone, who controls Viacom as well as CBS Corp. through his holding company National Amusements Inc., told analysts he was pleased with “substantial preliminary interest” from bidders for some of National Amusements’ assets. But he offered few specifics.