The Melrose Avenue movie studio suffered from the DVD blues and tough comparisons. Due in part to Paramount's thin film slate, Viacom's revenue declined 6% to $3.14 billion for the 2013 fiscal second quarter, ended March 31.
For the quarter, Viacom's earnings fell 18% to $478 million, or 96 cents a share, compared to $1.07 a share, in the year-earlier period.
Wall Street analysts, however, were encouraged by increases in advertising revenue at Viacom's signature television networks, primarily Nickelodeon, which has seen ratings improve in recent weeks after a yearlong slump.
Paramount's filmed entertainment revenue dropped 20% to $941 million compared with $1.17 billion in the year-earlier period. Paramount produced $65 million in operating income for the quarter, which represented a dramatic 43% decline.
The problem appeared to be that Paramount was unable to squeeze as much money from its home entertainment unit. Revenue in that division tumbled 38% due to fewer releases and less spectacular titles.
Worldwide theatrical revenue was down 15% compared with the fiscal second quarter of 2012, when Paramount was still collecting receipts for its hit film "Mission: Impossible -- Ghost Protocol," released in the previous quarter. This year's fiscal second quarter offered "Hansel & Gretel: Witch Hunters" and "G.I. Joe: Retaliation," which performed better than the films released during the year-earlier period.
"The year ahead remains strong," Viacom Chief Executive Philippe Dauman said in a statement.
Wall Street analysts were not expecting much from Paramount, but they were pleased that the picture at the company's television networks -- Nickelodeon, MTV, VH1, Comedy Central and BET -- was better than expected. Several of Viacom's TV networks have been dealing with lower ratings.
For the television networks division, revenue was up 2% to $2.2 billion due to increases in advertising revenue and subscriber fees. Operating income was down 2% to $873 million.
Viacom is controlled by Los Angeles-based billionaire Sumner Redstone.