Shares dropped as much as 7.6 percent to $32.40 in late trading as investors took little solace after quarterly sales and profit beat analysts’ estimates. The potential exit of a movie-financing partner in China also weighed on the stock.
Bloomberg reports the subscriber losses add to the tasks facing Chief Executive Officer Bob Bakish as he attempts to turn around Viacom, the beleaguered media company just emerging from a fight for control and a period of executive turnover. TV networks MTV, Comedy Central and BET have been losing viewers, and the Paramount Pictures film division has been losing money.
While the rate of subscriber losses in the current period would be better than last quarter’s 3.5 percent decline, according to Viacom, the figures reflect the difficulties ahead for the company, which makes almost 80 percent of its sales from its TV networks. Ratings have suffered as young viewers watch more and more video online.
Viacom posted its highest quarterly revenue in almost two years, boosted by the acquisition of an Argentine TV network and the improved performance of Paramount. A 2 percent gain in global advertising sales and higher fees charged to cable and satellite providers also contributed to the growth.
Fiscal third-quarter sales jumped 8.3 percent from a year earlier to $3.36 billion, compared with the $3.3 billion average of analysts’ estimates. Paramount posted its first profit since the final quarter of 2015, and boosted sales thanks to “Transformers: The Last Knight,” the fifth film in the franchise.