Viacom CEO Philippe Dauman walks down a sidewalk during a break on the first day of the Allen and Co. media conference in Sun Valley, Idaho July 9, 2014. REUTERS/Rick Wilking
November 13, 2015
By Jessica Toonkel and Abhirup Roy
(Reuters) – Viacom Inc <VIAB.O>, the owner of MTV, Comedy Central and Nickelodeon, reported weaker-than-expected quarterly revenue on Thursday, although declines in ad sales for its U.S. cable TV business were not as steep as analysts had anticipated.
Chief Executive Officer Philippe Dauman told analysts on a conference call that he expected U.S. ad sales to continue to improve this quarter. Viacom shares rose nearly 3 percent.
The revenue miss was largely due to a lack of hit releases from the company’s Paramount film studio.
Domestic advertising revenue fell 7 percent in the fourth quarter ended on Sept. 30, while analysts had expected an 8.4 percent drop.
The cable industry faces an increasing threat to revenue as consumers switch to streaming services such as Netflix <NFLX.O> and Hulu, a trend known as “cord-cutting.”
Viacom has also been facing questions about a successor to 92-year-old Chairman Sumner Redstone, who controls about 80 percent of the voting shares in the company. There was no mention of a succession plan on the call.
In addition, the media company has suffered from weak ratings at a number of its networks.
However, the company’s Vantage data product, which helps companies provide more targeted television ads, is drawing growing interest, Dauman said. Viacom has 11 major advertisers using Vantage, which it introduced in April, and expects to have 33 by May.
Filmed entertainment revenue dropped 24 percent to $1.03 billion, short of the $1.16 billion average estimate of analysts surveyed by FactSet StreetAccount.
“Terminator: Genisys” grossed about $441 million worldwide, while “Mission: Impossible-Rogue Nation” generated about $682 million, according to Box Office Mojo.
But a year earlier, “Transformers: Age of Extinction” alone grossed $1.10 billion worldwide.
Revenue from the company’s media networks business, including its cable interests, rose 5 percent, helped by a rise in international ad sales, especially in Europe.
But total revenue dropped 5 percent to $3.79 billion, missing the analysts’ average estimate of $3.88 billion, according to Thomson Reuters I/B/E/S.
Net income from continuing operations attributable to Viacom rose to $884 million, or $2.21 per share, from $732 million, or $1.72 per share, a year earlier. Analysts on average had expected $1.55 per share.
Shares of Viacom, which had fallen about 35 percent this year, were up 2.6 percent at $50.64 in afternoon trading.
(This story has been refiled to correct age in paragraph 6 to 92)
(Reporting by Jessica Toonkel in New York and Abhirup Roy in Bengaluru; Editing by Ted Kerr and Lisa Von Ahn)