Earnings: Viacom | J.C. Penney |

Interest Expense Sinks Viacom Earnings

NEW YORK (Reuters) - Viacom Inc. (VIA) Thursday said first-quarter earnings fell as higher interest expense offset strong revenue from its cable networks and the contribution of its recently purchased DreamWorks movie studio.

The company, which spun off television and radio broadcaster CBS Corp. (CBS) at the beginning of January, said profit fell to $317.2 million, or 43 cents per share. That compares with year-earlier earnings of $350.3 million, or 47 cents per share, which were calculated as if CBS had not been part of Viacom.

Year-earlier pro forma earnings, which were adjusted for certain debt and related interest expenses, were $325.6 million, or 43 cents per share, Viacom said.

The latest results beat the analysts' average forecast of 40 cents per share, according to Reuters Estimates.

Revenue increased 12 percent to $2.37 billion.

Viacom spun off CBS to try to attract new investors by providing a more defined business structure with its youth-oriented MTV Networks division and its movie properties.

The company affirmed its full-year 2006 forecast for double-digit revenue and operating income growth, with earnings per share from continuing operations expected at $1.95 to $2.00. Analysts were expecting $1.97, excluding special items.

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J.C. Penney Earnings Improve

NEW YORK (Reuters) - J.C. Penney Co. Inc. (JCP) Thursday reported a 22 percent rise in quarterly earnings as improved merchandise lured shoppers to stores.

J.C. Penney reported net income of $210 million, or 89 cents per share, for the fiscal first quarter ended April 29, compared with earnings of $172 million, or 63 cents per share, a year earlier.

The company reported earnings per share from continuing operations of 90 cents compared with 62 cents a year earlier.

Analysts, on average, had been expecting it to earn 88 cents per share, according to Reuters Estimates.

J.C. Penney has wrapped up a five-year turnaround plan and is working to change its image from that of a frumpy department to a fashionable retailer by stocking its shelves with new and exclusive merchandise.

Its shares had gained roughly 20 percent year to date through Wednesday, while competitor Kohl's Corp. (KSS) has gained 17 percent and Federated Department Stores Inc. (FED) has risen almost 18 percent.

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