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Entertainment conglomerate Viacom on Thursday reported improved financials for its fiscal fourth quarter as operating profit at its film unit rose amid higher revenue and lower expenses, while its U.S. TV advertising revenue growth accelerated as well.
The company, led by CEO Philippe Dauman, reported adjusted net earnings from continuing operations of $739 million, up 18 percent compared to $626 million in the year-ago period, beating Wall Street expectations. Net earnings of $804 million compared to $650 million in the year-ago period, while revenue rose 9 percent to $3.65 billion.
Analysts had, on average, forecast earnings of $686 million.
Viacom’s film unit posted a revenue gain of 11 percent, while operating profit soared 49 percent to $291 million. The company cited higher revenue and lower expenses. It posted revenue growth in its home entertainment, ancillary and theatrical units. Theatrical revenue increased 31 percent due to stronger
carryover revenue, primarily driven by the release of World War Z in the prior quarter. The marketing spend for that also mostly fell into the prior quarter.
Home entertainment revenue rose 24 percent, “reflecting a strong mix of titles and one additional release in the current-year quarter,” Viacom said. The company cited the “strong performance of the Star Trek and GI Joe franchises in the home entertainment market.”
Ancillary revenue increased 54 percent driven by fees associated with Marvel distribution rights sales and “significant growth in the proportion of digital distribution revenues for key home entertainment releases in the quarter,” it said.
The media networks unit revenue rose 7 percent in the latest quarter, with Viacom’s operating profit in its fiscal fourth quarter rising 11 percent in the unit to $1.04 billion.
U.S. TV advertising revenue rose 10 percent, up from 6 percent in the previous quarter. Worldwide advertising revenue also rose 10 percent after a 5 percent gain in the fiscal third quarter.
Full fiscal year adjusted net earnings came in at $2.32 billion, compared with $2.26 billion in the previous year. Revenue declined from $13.89 billion to $13.79 billion.
Film unit operating profit for the full fiscal year amounted to $234 million, down 28 percent compared with $325 million in the previous year amid an 11 percent revenue decline. Media networks operating and revenue each rose 5 percent.
Media mogul and executive chairman Sumner Redstone controls Viacom and CBS Corp.
“Viacom’s commitment to creative and operational excellence, and our continued investment in content, delivered an outstanding quarter and strong fiscal year,” Dauman said. “Our media networks had strong growth in both advertising and affiliate revenues as ratings improved across our brands.” He added: “We are very optimistic about Paramount’s ambitious pipeline of branded and franchise films.”
Said Redstone: “Viacom’s outstanding performance proved once again the broad global demand for our valuable content. Looking forward, our world-class brands are perfectly positioned to build on this performance and achieve even greater success.”
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