Lower Revenues, Profit at Viacom

NEW YORK: Viacom has reported a 5-percent decline in its first-quarter revenues to $3.83 billion as a result of weaker home-entertainment results, while adjusted net earnings dropped 11 percent to $620 million.

Viacom’s media networks segment recorded a strong Q1, with revenues gaining 6 percent to $2.38 billion. This was driven by a gain in ad revenues—10 percent in the U.S. and 7 percent worldwide—and in affiliate revenues, which were up 10 percent. However, as a result of lower consumer products and DVD sales, ancillary revenues were down 18 percent.

Filmed entertainment, meanwhile, took a 16-percent hit in revenues to $1.5 billion, with home-entertainment revenues down 44 percent as a result of difficult prior-year comparisons. Television license fees were also down in the quarter to $274 million, a 38-percent decline, due to fewer available titles. Theatrical revenues, however, rose to $416 million, and ancillary revenues grew 56 percent to $169 million.

Commenting on the results, Sumner M. Redstone, executive chairman, said, "Viacom is off to a solid start to what is shaping up to be a very strong year. Our businesses are strong, our creative engines are producing more hits than ever and, most importantly, we are continuing to deliver greater shareholder value."

Philippe Dauman, president and CEO, added, "Our focus on nurturing our brands and investing in the creation of world-class content is paying off in a multitude of ways.  Our strong market research and our revitalized programming have produced big hits across several of our networks.  MTV is thriving with three of the top five original cable series last quarter and Nickelodeon continues its reign as the number-one destination for kids.  BET broke new records with the number one ad-supported sitcom telecast in cable TV history as 7.7 million viewers tuned into the cable debut of The Game, which was followed by the premiere of BET’s newest scripted series Let’s Stay Together, which ranked among the top five ad-supported sitcom premieres in cable TV history.  Comedy Central, Nick at Nite and TV Land all are broadening their reach, which is attracting new advertisers as the marketplace strengthens.  Paramount Pictures delivered a stellar box office performance this past quarter with popular and critically acclaimed films, including Academy Award nominees The Fighter and Ethan and Joel Coen’s remake of True Grit.  Looking ahead in fiscal 2011, we have a powerhouse line-up of franchise films and we expect our home entertainment results to improve as we now move past the last few quarters of difficult year-over-year comparisons. Finally, the strength of our businesses and disciplined financial strategy have allowed us to continue to return capital to shareholders in the form of stock repurchases and cash dividends."