Viacom
posted sinking fiscal first-quarter revenues and net earnings -- with lower advertising revenues a key contributor.
U.S. advertising sank 4% -- even with pricing increases. Viacom said there was
continued declines in “traditional ratings at some of our networks.”
Michael Nathanson, senior research analyst at MoffettNathanson Research, says these advertising results were
slightly better than expected. His estimates were that Viacom’s U.S. ad results would sink 5.5%.
“Viacom benefited from a strong scatter market and improving ratings, although it
was not able to fully monetize these with heavier upfront spending in the quarter.”
It only recorded flat U.S. affiliate fees versus an estimated gain of 3%. Nathanson says this was
likely impacted by lower subscription video on demand revenues in the period.
Viacom’s international advertising from its worldwide networks was down 2%, the later driven to do
unfavorable international exchange rates. Without this, Viacom says international advertising revenues would have climbed 6%. Worldwide affiliate fees slipped 1%.
The company's filmed
entertainment revenues from its Paramount unit sank 15% to $612 million due to declines in theatrical and home entertainment revenues, which overwhelmed increases in license fees. The unit had
unfavorable comparisons with strong results from “Teenage Mutant Ninja Turtles” a year ago.
Overall, Viacom revenues sank 6% overall to $3.15 billion with its media networks
revenues declining 3% to $2.6 billion. Net income sank 10% to $449 million.
Wall Street investors had a dim perspective of Viacom's results; its mid-day Tuesday stock price was down sharply, 15% to $35.45.