Viacom Posts Quarterly Profit, Lower Revenues

NEW YORK: Viacom has recorded $303 million in net profit for the fiscal second quarter, despite a 3-percent decline in quarterly revenues.

Revenues for the quarter ended March 31 were $3 billion. Media networks revenues were $2.38 billion, a decline of 3 percent. Domestic advertising revenues were down 5 percent, as pricing increases were more than offset by softer ratings at some of the networks. International advertising revenues dipped 1 percent, due to a 7 percent adverse effect of foreign exchange. Absent the impact of foreign exchange, international advertising revenues increased 6 percent, driven primarily by growth in Europe. Domestic affiliate revenues decreased 2 percent, with a modest decline in subscribers and a previously disclosed rate adjustment with a major distributor partially offset by rate increases across the remaining subscriber base. International affiliate revenues increased 4 percent, thanks to new channel launches, increased subscribers and rate increases. Without a 7 percent adverse impact of foreign exchange, international affiliate revenues increased 11 percent.

Filmed entertainment revenues were down by 1 percent to $655 million, as an increase in license fees and theatrical revenues was more than offset by declines in home entertainment and ancillary revenues. Excluding foreign exchange, which had a 2 percent unfavorable impact, worldwide revenues increased 1 percent. Worldwide theatrical revenues increased 6 percent to $217 million in the quarter, with revenues from Daddy’s Home and The Big Short, which were both released late in the first fiscal quarter. License fees increased 17 percent to $240 million in the quarter, driven by the licensing of certain titles for SVOD services. Worldwide home-entertainment revenues decreased $41 million in the quarter, with lower revenues associated with catalogue and third-party distribution titles.

Quarterly adjusted operating income declined 29 percent to $586 million. Media networks adjusted operating income decreased 11 percent to $805 million, as revenues declined and programming expenses increased. Filmed entertainment adjusted operating loss was $136 million, driven by the performance of certain films released in the quarter.

Philippe Dauman, executive chairman, president and CEO of Viacom, said, “Viacom’s brands are among the most popular and culturally connected in the world. Nickelodeon remains the number one network for kids and many of our other networks have shown sequential improvements in ratings and consumption across platforms. The continuing strength of our brands was validated by our recent renewals with DISH and Frontier on attractive terms. In the past year, we have successfully closed long-term carriage agreements with domestic distributors representing more than 44 million subscribers. Around the world we continue to expand the global reach of our networks, launching several new channels in the quarter. At Paramount, we are looking forward to upcoming blockbusters Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond this summer.

“We are responding to industry consumption shifts with innovative, thoughtful and long-term strategic solutions and are generating meaningful results in many important areas, including content creation, data-based audience measurement and distribution innovation. There is much more work to be done, but we see the path to growth ahead and are very optimistic about our future.”