Viacom Earnings Drop as U.S. Ad Sales Plunge
Viacom's first-quarter earnings fell as the company's domestic ad revenues fell 6%
Net earnings were $500 million, or $1.20 a share, down 9% from $547 million, or $1.20 a share, a year ago..
Total revenue increased 5% to $3.34 billion.
The figures were mostly below Wall Street's expectations.
Operating income for Viacom's Media Networks unit, which includes Nickelodeon and MTV, was down 1% to $1.104 billion in the quarter. Revenues were up 4%.The company said domestic affiliate revenue rose 8% and worldwide affiliate revenues were up 6%. Domestic advertising revenues were down 6%. Worldwide advertising revenue was up 3%, with the acquisition of Channel 5 in London creating a 60% increase in international advertising revenues.
"Viacom's focus on developing popular franchise properties and constantly expanding our growing international presence drove solid top line results and record earnings per share this quarter," CEO Philippe Dauman said in a statement. "We continued to deliver increased revenues in our media networks operations driven by steady growth in affiliate revenues, and also benefited from Paramount Pictures' Oscar-nominated Interstellar and our very successful company-wide franchise, Teenage Mutant Ninja Turtles."
Dauman added that "the media business is evolving faster than ever, but our mission remains unchanged: to continually develop more and better entertainment programming and deliver it to our engaged audiences on every screen and on every platform worldwide."
He said that "to maintain our leadership position, we will continue to innovate and to manage our business as effectively and efficiently as possible, embracing change and adopting new technologies to better measure and monetize our content and meet industry-wide challenges. Viacom is financially strong and extremely well positioned for the future, with the talent and the creativity to grow our core business and continue to deliver increasing value to our investors."
Before the results were announced analyst Marci Ryvicker lowered her estimates for Viacom, noting that the company's issues include soft ratings and currency headwinds.
Ryvicker said that despite adding new original programming to its lineup during the important holiday season, Nickelodeon's viewership slid in the quarter. "The same goes for MTV and virtually every other net in the portfolio," she said in a research note. "While a portion of the decline can be attributed to the Nielsen measurement issue, ratings are still down a bit more than we anticipated."
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.