Viacom Quarterly Earnings Exceed Expectations

Viacom CEO Philippe Dauman

The conglomerate led by Philippe Dauman posts record full-year earnings per share, with 'Turtles' helping film revenue in the latest quarter

Viacom, led by CEO Philippe Dauman, on Thursday reported better-than-expected fiscal fourth-quarter and full-year financials. Its fiscal-year earnings per share and operating profit set a company record.

Net earnings of $732 million for the latest quarter were down 9 percent from $804 million in the year-ago period. Net earnings from continuing operations came in at $742 million, compared with $812 million in the year-ago period. Amid continued stock buybacks, earnings per share rose year-over-year, though, to $1.71 on an adjusted basis.

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Revenue rose 9 percent in the quarter to $3.99 billion from $3.65 billion. Wall Street had, on average, expected quarterly earnings of $722.6 million, or $1.68 per share, on revenue of $3.90 billion.

Revenue rose in both of the company's units, film and media networks. Film revenue was up 12 percent, with media networks revenue up 8 percent.

In the film unit, Viacom said "strong results from current-quarter releases and the carryover performance of Transformers: Age of Extinction drove theatrical revenues up 226 percent to $557 million," while home entertainment revenue declined 38 percent as the firm had two fewer releases than in the year-ago quarter. Teenage Mutant Ninja Turtles was a key release for Paramount Pictures in the latest quarter.

But film unit operating profit fell 27 percent to $213 million due to the P&A cost for Interstellar falling into the latest quarter and a year-ago benefit from fees associated with Marvel distribution rights sales.

As expected, U.S. TV networks advertising was down. The company posted a 5 percent drop due to "ratings challenges," while international ad revenue rose 33 percent, helped by the acquisition of British broadcaster Channel 5 late in the quarter. Said Viacom executive chairman Sumner Redstone: "As we conclude another fiscal year, Viacom remains well-positioned as a creative leader with many of the world's most innovative media properties and best entertainment brands.”

Dauman said: "Viacom's record financial results in 2014 demonstrate the strength of our brands and continuing momentum for our strategy of investing in creativity, with a relentless focus on growing demographic and geographic markets and embracing new distribution platforms."

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He added: "Despite ratings challenges and uncertainty in the scatter advertising market at the close of the year, Viacom's advertising revenues grew in fiscal 2014, as our creative and marketing teams rolled out innovative new offerings. We also continue to take the lead in defining the next generation of measurement tools that will more fully capture the growing multi-platform engagement of our audiences."

Dauman also touted a recent U.K. acquisition, saying: "Our September acquisition of Channel 5 has already made a positive impact on our business and points the way to further significant long-term growth of our international business."

He also lauded Paramount for delivering "the top movie of 2014 and the largest-ever theatrical release in China Transformers: Age of Extinction," adding that the studio "successfully launched another long-term franchise with the Teenage Mutant Ninja Turtles."

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

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