Viacom was down 4% in overall advertising revenues to $1.17 billion — off 5% in U.S. domestic advertising results — in its most recent quarterly period ending March 31.
Michael Nathanson, senior research analyst, of MoffettNathanson Research, writes: “With less upfront volume, a weak scatter environment and double-digit declines in core demo network ratings, ad declines for Viacom were inevitable.”
Todd Juenger, senior analyst at Sanford C. Bernstein, notes: “The controversy on the stock remains whether audiences and advertising will recover, whether distribution is safe, and what M&A scenarios exist.”
He adds: “Those who hope for advertising revenue stabilization/recovery are largely buying into a belief that "non-Nielsen-dependent revenue" — a phrase coined by Viacom a few quarters back — will grow significantly.”
Juenger says much of that advertising is direct-response advertising, lower-value advertising by many analysts. He also says that Viacom continues to add more advertising inventory into programming — now up 9% versus the same year ago time period.
Viacom U.S. cable networks were helped in the period by higher worldwide affiliate fee revenue — gaining 3%. Overall cable network revenues were 3.2% higher to $2.5 billion in its second-quarter 2015 results.
Film revenue was down 21% to $659 million — close to estimates. Viacom’s Paramount unit had only one big release during the period, “SpongeBob: Sponge Out of Water,” versus three big releases in the same period a year ago.
Company-wide, Viacom revenue was down 3% to $3.08 billion with net loss of $53 million versus a net profit of $502 million in the same period a year ago. Results were affected by the previously announced $784 million restructuring charge.
Midday trading of the stock was down 0.1% to $72.17.