• by Wayne Friedman , May 10, 2019

While Viacom’s domestic advertising continues to have some negative growth, it is slowly improving in its latest quarter. More troubling results come as U.S. affiliate revenue slips into a negative trend.

In its fiscal year second quarter, Viacom’s U.S. advertising dropped 2.5% to $820 million. Advertising results improved over the last few periods -- from a 4.3% decline to a 3.2% drop and now to a 2.5% fall. The company estimated it should show ad growth for the year.

Positive results should come from Viacom’s Pluto TV acquisition, its ad-supported OTT (over the top) TV platform, later in the year. Todd Juenger, media analyst of Bernstein Research, estimates that Pluto currently pulls in $150 million per year.

Viacom says in the current quarter, revenue from its advanced advertising unit rose 76% versus its fiscal first quarter's 54% gain.

U.S. affiliate revenue sank 2.1% to $936 million, while in it previous quarter showed a 5% increase.

Viacom says the decline was due to SVOD (subscription video-on-demand platform) library licensing, which was halted while finalizing Pluto TV’s content strategy. Core affiliate fees dropped from a 2% hike in the previous quarter to flat results this period. A decline in subscribers was blamed.

All this occurred while Viacom’s international business posted lower double-digit declines -- down 19% in advertising revenues to $213 million and another 19% in affiliate fees at $203 million.

Viacom’s filmed entertainment revenue was down 1% to $730 million. Paramount's theatrical revenue more than tripled in the period, due to strong global box-office numbers from “Bumblebee” and “What Men Want.”

Viacom revenues were down 6% overall to $2.96 billion, with net income rising 40% to $368 million, the latter coming from cost-cutting.

Viacom's stock price on mid-day Friday trading was up 1% to $28.79.