- Associated Press - Friday, August 6, 2010

NEW YORK (AP) - Viacom Inc. posted a nearly 52 percent increase in its second-quarter profit thanks to cost cuts and higher cable revenue, but a Janney analyst downgraded its shares Friday saying the ad recovery that helped boost results is already well known.

Tony Wible downgraded Viacom shares to “Neutral” from “Buy.” Cost-cutting at its Paramount Pictures film studio helped lift Viacom’s results above expectations. But Wible said the company’s deals with cheap rental providers, such as Netflix and Redbox, “may cannibalize long-term results” at the studio.

The analyst said Viacom is in a position to benefit from the recovery in the advertising market. But Wible said its “dependence on advertising leaves it more exposed than other big media conglomerates to the fear of another round of economic deterioration.”

Viacom is controlled by billionaire Sumner Redstone. Its cable channels include BET, MTV, Comedy Central and Nickelodeon.

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