Viacom CEO Calls Stock Decline "Way Overdone," Touts Outlook
Philippe Dauman says the company should return to ad growth next year, and its China business is slightly profitable.
Viacom expects to return to advertising revenue growth next year, CEO Philippe Dauman said on Thursday as he told analysts that the conglomerate's stock has been pushed down too low amid investor concerns about the TV networks business.
The stock sell-off has been “way overdone," he said, highlighting the "inherent value" of Viacom's international portfolio, among other things. He argued that the company's value “far outpaces what’s reflected in the marketplace" even though he acknowledged that the industry was “in the midst of significant change.”
The stock fell along with other media and entertainment stocks on Wednesday amid investor worries about the TV networks business following Walt Disney's earnings and reduced guidance for ESPN. As of 10:15 a.m. ET on Thursday, Viacom's stock was down 13.1 percent at $44.69.
But with change also comes opportunity, "and Viacom is seizing every opportunity," he said. "We are taking all measures necessary to address the changing media landscape."
Dauman mentioned mobile video as a business that could soon be worth hundreds of millions of dollars a year. "This is a particularly significant opportunity for us," he said.
Also, international is "one of Viacom’s most important and underappreciated assets," Dauman said. He highlighted a recent acquisition in India and said that China was a "complicated" market, but was for Viacom profitable, "even though modestly so."
Overall, the Viacom CEO told analysts that "we have gone in the past through these market dislocations" and always re-emerged with new vigor.
With syndicated and acquired shows performing less than in the past, Dauman said "across the company, we have never spent more money on original programming as we do today."
He also mentioned the exit of Jon Stewart as host of The Daily Show on Comedy Central and lauded him before his last episode Thursday night. Dauman said Viacom was "so proud" of Stewart's work and his "enormous contributions" and his role as an "important voice in the national conversation."
He added that "we could not be more pleased with the next chapter for the show," touting new host Trevor Noah as late night's first millennial host. He said he was excited about Noah's potential to bring in a younger audience.