Viacom Beats Revenue Estimates

Viacom Inc, owner of MTV, Comedy Central and Paramount, reported mixed quarterly results Thursday as higher-than-expected revenue in its film unit and improved domestic ad sales offset lower revenue from U.S. cable TV operators and online distributors.

Like other media companies, Viacom has struggled to boost ratings and advertising as viewers increasingly watch their favorite shows on electronic devices and phones, reports Reuters.

Revenue from Viacom’s film unit, which includes theater and licensing revenue, grew 2 percent to $789 million from a year earlier.

However, domestic affiliate revenue fell 3 percent to $948 million in the quarter. Analysts had expected a 1.8 percent drop, according to financial data and analytics firm FactSet.

Domestic ad sales were flat at $936 million, while analysts had expected a two percent increase. Still, U.S. domestic ad sales were Viacom’s strongest since 2014, according to a Jefferies report on Thursday.

Chief Executive Bob Bakish, who took the helm late last year, has made improving relations with cable and satellite companies a priority.

Last month, Viacom reached a deal with Charter Communications (CHTR.O) to put eight of its most popular networks in Charter’s cheapest U.S. cable bundle. Under the deal, which was announced Wednesday, Viacom will also create original content for Charter’s Spectrum customers and all its channels will remain available.

Net profit attributable to Viacom rose to $674 million, or $1.67 per share, in its fiscal fourth quarter ended Sept.30, from $254 million, or 64 cents a share, a year earlier.

The quarter included a $127 million gain from an asset sale. Total revenue rose 2.9 percent to $3.32 billion.

Bob Bakish, President and Chief Executive Officer, said, “In the fourth quarter and full year, we made strong progress against our plan to fundamentally stabilize and revitalize Viacom, with top line gains in both Media Networks and Filmed Entertainment segments driven by continued execution on our strategic priorities.

Bob Bakish

"We saw significant ratings increases across the portfolio, which drove sequential improvement in domestic advertising; our international business continues to expand, delivering double-digit revenue increases; and Paramount is demonstrating growth across multiple revenue streams as it rebuilds the theatrical slate and continues to grow its TV production business. Additionally, we have completed several multi-year renewals of major distribution contracts - including our recent agreement with Charter - which secure broad, long-term carriage of Viacom's networks for subscribers and expand our relationships with distributors through new, forward-looking advanced advertising and content production partnerships. We realized these achievements and established a stable base while reducing debt, improving free cash flow and strengthening our balance sheet.

“Viacom is stronger and our momentum continues to build. To accelerate our transition to long-term, sustainable growth, we are ramping up the evolution of Viacom's media business to better serve next generation platforms and solutions while continuing to diversify our business and strengthen our global portfolio of flagship brands. In the coming year, we will continue to focus on unleashing the full creativity and energy of Viacom to create greater value for our shareholders and audiences.”