NEW YORK (Dow Jones) – Viacom Inc.’s (VIA) fourth-quarter profit more than quadrupled because of an easy comparison due to large year-ago restructuring charges, but its sales declined as advertising remained weak.

The company’s film division, which includes the Paramount Pictures studio, reported profits again amid a string of recent box office successes but concerns remain about its investment in the Epix premium film network. Also a worry is the company’s Rock Band video game, which reported lower sales.

The company’s results, however, beat expectations on Wall Street, and its Class A shares recently rose 37 cents, or 1.2%, to $30.63.

Viacom Chief Executive Philippe Dauman said during a conference call with analysts that the television industry will evolve over the next decade from a “primarily linear world” to a digital, on-demand business where the industry is still looking for sustainable business models.

Despite the uncertainty, Dauman said, “We do know that Viacom will continue to provide much of the world’s greatest entertainment content across all screens and across all geographies.”

The New York company, which owns cable channels including MTV and Comedy Central, has been hurt by slow advertising sales, like other media firms. In the quarter, ad revenue fell 3% worldwide and 4% domestically.

“We’re not out of the economic woods yet, particularly in certain international markets where the recovery appears to be lagging the U.S., and domestic unemployment continues to be a serious concern for all marketers,” Dauman said. “But we do see growing signs of strength as more advertisers return to the market and new strong categories of advertising emerge, notably in several increasingly competitive sectors of the technology industry.”

In the current quarter, Dauman said the company expects “sequential improvement,” suggesting that year-over-year results may remain negative.

Morgan Stanley analyst Benjamin Swinburne said he expects Viacom to continue losing share in the advertising market to its peers.

Meanwhile, Viacom’s filmed-entertainment segment returned to profitability amid downsizing and the success of its blockbuster “Transformers” sequel, the movie “Paranormal Activity” and DVD releases, like “Star Trek.” Paramount, in a strategy shift, now produces a smaller slate of films, anchored by franchises.

Viacom reported a profit of $694 million, or $1.14 a share, up from $173 million, or 28 cents a share, a year earlier. Excluding items such as the restructuring charge, adjusted earnings from continuing operations rose to $1.09 a share from 76 cents. Revenue dropped 3.4% to $4.1 billion.

Analysts polled by Thomson Reuters had forecast earnings of 88 cents a share on $4.22 billion in revenue.

Viacom’s networks division, which includes its TV channels, saw revenue decline 5.7%, but profit rise 2.6%. A 10% gain in affiliate revenue offset weak sales of Rock Band, the company’s music video game venture, which has been a disappointment so far as the entire video game industry has suffered a slowdown.

Dauman said Viacom is looking to reduce its cost structure at its games unit, while it shifts from the high-cost hardware business to the low-cost software business.

“We think we have the best games in category, and we’ll continue to roll out exciting products,” Dauman said.

Revenue at the company’s filmed-entertainment segment fell 0.9%, while profit more than tripled because of heavy cost-cutting. Swinburne said he’s concerned about the long-term profitability of the division due to the company’s investments in Epix.

Epix is a joint venture created by Viacom, Lions Gate Entertainment Corp. (LGF) and Metro-Goldwyn-Mayer Studios Inc. as part of an effort to maintain the rich fees studios receive for their movies to appear on TV networks. Viacom’s share of the venture grew to 50% during the quarter, a sign that MGM may be reducing its stake amid credit concerns.

Viacom Chief Financial Officer Tom Dooley said that to date, the company has invested $82 million in Epix, and it has received $110 million in cash from films it has delivered to the venture.

“As we ramp up distribution of Epix, the revenue will follow,” Dauman said, adding that the company has no plans to consolidate the venture. “We’re pleased with where we are on the trajectory there.”

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com

(Nathan Becker contributed to this article.)

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