Viacom has good news and bad news for investors this morning.
First, the sunny stuff: Your stock price is currently rising in pre-market trading, as the Paramount Pictures parent company topped Wall Street’s expectations at both its top and bottom lines. Media analysts had forecast earnings per share (EPS) of $1.01 on $3.01 billion in revenue, per Yahoo Finance. Viacom actually reported $3.107 billion in revenue and an adjusted $1.05 per share in earnings.
Unfortunately, this 2016 third fiscal quarter proves that it is definitely no longer 2015. Income dropped 29 percent year over year for the 90 days ending June 30, with the company’s media networks losing most of that. Domestic ad sales slipped 4 percent in the quarter due to softer overall TV ratings from the cable portfolio.
On the big screen, the latest “Teenage Mutant Ninja Turtles” lifted sales — just not enough. Licensing for SVOD pitched in as best it could for that filmed-entertainment arm.
“In the quarter, Viacom continued to execute on our strategic plan by increasing investment in high-quality original content, enhancing our connection to audiences, accelerating the growth of data-driven advertising products and further expanding our unmatched global reach,” Philippe Dauman, executive chairman, president and CEO of Viacom, said. “Ratings increased at several of Viacom’s major networks, including Nickelodeon, Nick at Nite, VH1 and TV Land, and ratings trends at nearly all of our networks showed sequential improvement as we successfully completed a very strong upfront across our brands.”
“Internationally, our media networks are driving strong double-digit revenue growth, with new channel launches, growing distribution partnerships and substantial ad sales gains,” he continued. “Viacom’s third quarter results were impacted by the underperformance of ‘Teenage Mutant Ninja Turtles: Out of the Shadows.’”
Each quarter could theoretically be Dauman’s last, as he has been embroiled in a nasty court-of-law (and -of-public-opinion) battle with former mentor Sumner Redstone. The Viacom executive alleges, however, that he’s really only fighting that man’s daughter, Shari Redstone, whom Dauman claims has been pulling the puppet strings of her 93-year-old mentally incompetent father. The Redstone camp wants Dauman and others yanked from the Viacom Board of Directors, but judges and lawyers are still out to settle the legalities surrounding the ailing media mogul’s apparent declarations.
On Wednesday, VIAB stock closed its traditional U.S. trading day up 34 cents per share. Currently, you can add about two more quarters to that positive momentum.
Executives will host a conference call at 8:30 a.m. ET to discuss the financials further.