- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
Viacom on Thursday reported higher adjusted earnings from continuing operations for its fiscal second quarter even though it continued to see ratings weakness at some of its cable networks.
The entertainment conglomerate, led by president and CEO Philippe Dauman, posted adjusted quarterly earnings from continuing operations of $535 million, up 24 percent from $430 million in the year-ago period. Analysts had on average projected earnings of $488.7 million. The bottom line results exceeded Wall Street estimates.
“The upside was driven by digital licensing revenue,” said Evercore Partners analyst Alan Gould. “The numbers are positive, but the Street will want to know how recurring the digital revenue is. Also, some may perceive the company to be generating short-term digital profits at the expense of the longer-term franchise value.”
Operating profit at the company’s TV networks business rose 11 percent to $893 million, while Viacom’s film operating profit jumped 195 percent to $115 million driven by lower distribution costs
Revenue reached $3.33 billion, up 2 percent. Wall Street analysts had on average predicted revenue of $3.34 billion. Film revenue declined 5 percent to $1.17 billion, but TV networks revenue rose 5 percent to $2.19 billion, including a 1 percent U.S. advertising revenue improvement. On a worldwide basis, ad revenue was unchanged. The key growth driver were affiliate fees, which rose 15 percent in the U.S. and 17 percent worldwide thanks to rate increases and particularly digital licensing deals.
The lower film revenue reflected lower theatrical and TV license fee revenue, partially offset by higher ancillary revenue. Worldwide theatrical revenue fell 19 percent as The Devil Inside, A Thousand Words, and Jeff, Who Lives at Home competed with year-ago hits Rango, No Strings Attached and Justin Bieber: Never Say Never.
“In the second quarter, Viacom continued its steady growth and delivered notably higher profitability, driven by relentless investment in our exceptional brands, and an ongoing focus on operational excellence,” Dauman said.
“Viacom continues its strong track record of growth and innovation, creating the world’s best entertainment content and operating more efficiently every day,” said executive chairman Sumner Redstone.
Dauman also touted the conglomerate’s film performance. “Paramount Pictures turned in outstanding bottom line results, with a targeted slate of films, a smart strategy that embraces new digital opportunities and an ongoing focus on efficiency,” he said. “In the current quarter, Titanic in 3D became a worldwide hit for the second time, and we look forward to the release of The Dictator, G.I. Joe: Retaliation and Madagascar 3: Europe’s Most Wanted later in the quarter.”
Sign up for THR news straight to your inbox every day