Viacom Net Earnings Down on Weak U.S. Ad Sales

January 29, 2015 World Screen

NEW YORK: For the first quarter of 2015, Viacom's net earnings were down 9 percent to $500 million, as domestic ad revenue fell 6 percent.

Quarterly revenues rose 5 percent to $3.34 billion, led by increases across the business. Media Networks revenues increased 4 percent to $2.65 billion, due to higher affiliate fees and advertising revenues. Domestic affiliate revenues increased 8 percent and worldwide affiliate revenues gained 6 percent, primarily due to rate increases. Domestic advertising revenues dipped 6 percent, though, reflecting lower ratings. Worldwide advertising revenues were up 3 percent, reflecting a 60 percent increase in international advertising revenues, driven by contributions from Channel 5, which Viacom acquired in September 2014.

Filmed Entertainment revenues improved by 6 percent to $720 million. Teenage Mutant Ninja Turtles, which was released in the fiscal fourth quarter of 2014, remained a strong performer in the current quarter, helping to drive a 6 percent increase in theatrical revenues and a 16 percent gain in home entertainment revenues. Home entertainment revenues reflect two film releases in the current quarter, compared with none in the same prior year period. License fees declined 9 percent.

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Sumner M. Redstone, the executive chairman of Viacom, said, “Viacom's powerful entertainment brands continue to lead the way in reaching global audiences with groundbreaking content. Our outstanding management team has positioned Viacom for continued success.”

Philippe Dauman, the president and CEO of Viacom, added, “Viacom's focus on developing popular franchise properties and constantly expanding our growing international presence drove solid top line results and record earnings per share this quarter. We continued to deliver increased revenues in our media networks operations driven by steady growth in affiliate revenues, and also benefited from Paramount Pictures' Oscar-nominated Interstellar and our very successful company-wide franchise Teenage Mutant Ninja Turtles.

"The media business is evolving faster than ever, but our mission remains unchanged: to continually develop more and better entertainment programming and deliver it to our engaged audiences on every screen and on every platform worldwide. To maintain our leadership position, we will continue to innovate and to manage our business as effectively and efficiently as possible, embracing change and adopting new technologies to better measure and monetize our content and meet industry-wide challenges. Viacom is financially strong and extremely well positioned for the future, with the talent and the creativity to grow our core business and continue to deliver increasing value to our investors."