Viacom needed a blockbuster

November 12, 2015 10:11 AM

Viacom Inc, the owner of MTV, Comedy Central and Nickelodeon, reported weaker-than-expected quarterly revenue on Thursday, largely due to a lack of hit movie releases.

Ad sales also fell in Viacom's U.S. cable TV business, but not by as much as some analysts had expected.

The decline in revenue from films reflected a lack of big hits in the latest quarter, compared with successes such as "Transformers: Age of Extinction" in the same period last year.

"Terminator: Genisys", released in the fourth quarter, grossed about $441 million worldwide, while "Mission: Impossible-Rogue Nation" grossed about $682 million, according to Box Office Mojo.

Last year's "Transformers: Age of Extinction" alone grossed $1.10 billion worldwide.

Revenue from Viacom's filmed entertainment business dropped 24 % to $1.03 billion in the three months ended Sept. 30, short of the $1.16 billion average estimate of analysts surveyed by FactSet StreetAccount.

Domestic advertising revenue declined 7 %, but this was less than the 8.4 % drop analysts had expected.

The cable industry faces an increasing threat to revenue as consumers switch to streaming services such as Netflix and Hulu, a trend known as "cord-cutting".

On top of this, Viacom has been hurt by weak ratings.

Revenue from the company's media networks business, which includes its cable interests, rose 5 %, helped by a rise in international ad revenue, especially in Europe.

But total revenue dropped 5 % to $3.79 billion, missing the average analyst 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.

Viacom, whose shares were down 1.4 % in premarket trade, reported adjusted earnings of $1.54 per share from continuing operations.

Analysts on average had expected a profit of $1.55 per share.

Up to Wednesday's close of $49.35, Viacom's stock had dropped about 35 % this year.

About the Author