With its anticipated re-coupling with CBS casting a shadow, Viacom reported third quarter earnings that beat Wall Street forecasts on Thursday.
For the three months ending on June 30, the film and TV conglomerate reported revenue of $3.36 billion and an adjusted diluted earnings-per-share of $1.33. Media analysts had forecast earnings per share (EPS) of $1.06 and $3.33 billion in revenue, according to a Yahoo Finance-compiled consensus.
In the year-ago period, Viacom reported revenue of $3.24 billion and an EPS of $1.18.
“Viacom delivered another strong quarter, as our core businesses and investments in strategic priorities fuel our growth and evolution. Importantly, we returned Domestic Advertising Revenue to growth, which is a direct result of the strategy we have been executing for the last two years and the significant progress we have made in scaling Advanced Marketing Solutions,” said Viacom CEO Bob Bakish. “Paramount’s momentum also continues, keeping us on track to deliver full year profitability. As this quarter shows, Viacom’s brands are strong, our strategy is delivering, and our investments continue to position us well for the future.”
Paramount, which was led by films “Rocketman” and “Pet Sematary” in the quarter, is on track for full year profitably in the 2019 fiscal year.
Like the major broadcast networks, Viacom saw a better-than-expected upfront ad sales marketplace, with high-single to double-digit price increases, which Viacom said was its highest rate of change in over a decade. Viacom overall was up 6% in domestic ad revenue, its first time it saw an increase in the last 20 quarters.
Pluto TV, which Viacom acquired in January, helped to drive gains for Viacom’s digital ad sales. Bakish said the streaming platform now has 18 million monthly average users, up from 12 million at the beginning of this year.
Viacom is in the middle of negotiations with CBS to re-join as one combined company under Bakish. A merger would represent a homecoming since the two companies operated as one until being split off in 2005.
The two companies had informally viewed Thursday as a natural goal post for a deal announcement, with both companies reporting their earnings on the same day. CBS will report its own third-quarter earnings after the bell on Thursday. A deal, though not expected on Thursday, could be reached by the end of the month.
Last week, the two companies reached a “working” agreement on the management structure. Joe Ianniello, who has served as acting CEO for CBS since Les Moonves’ ouster last September, would be offered an unspecified senior role overseeing brand assets, an individual familiar with the companies told TheWrap.
On its conference call with analysts, Viacom executives declined to talk about the impending merger.