Viacom had a mixed bag for its fiscal third quarter 2018, topping Wall Street’s earnings forecast, but missing on revenue.
For the three months ending on June 30, the film and TV conglomerate reported revenue of $3.24 billion and an adjusted diluted earnings-per-share of $1.18. Media analysts had forecast earnings per share (EPS) of $1.07 and $3.26 billion in revenue, according to a Yahoo Finance-compiled consensus.
During the same quarter of last year, Viacom reeled in $3.36 billion in revenue and earnings of $1.17 a share.
“Viacom produced another quarter of strong progress, with clear evidence that our turnaround is delivering results and that our evolution into a truly global, multiplatform, brand- and IP-driven entertainment company is well underway,” said CEO Bob Bakish. “Paramount Pictures is revitalized, with outstanding box office performance and growing television production revenues driving substantial gains in profitability. Our Media Networks brands posted significant gains in both linear flagship share and digital consumption, in addition to sequential improvements in domestic affiliate revenue growth.”
Cost-cutting helped offset a 4 percent decline in revenue from the previous quarter, while programming spending increased.
Revenues for Viacom’s media networks decreased 2 percent to $2.5 billion in the quarter, as a 17 percent increase in worldwide ancillary revenues to $158 million was more than offset by a 4 percent decrease in worldwide advertising revenues to $1.19 billion and a 3 percent decrease in worldwide affiliate revenues to $1.15 billion.
Domestic theatrical revenues grew 58 percent, driven by the strong performances of “A Quiet Place” and “Book Club,” while international theatrical revenues decreased 58 percent, reflecting comparisons against the release of “Transformers: The Last Knight” and “Ghost in the Shell” in the prior-year quarter.
However, its operating profit rose to $44 million, compared to just $9 million a year ago, thanks to lower operating expenses and higher domestic revenues. “A Quiet Place” has grossed more than $188 million domestically to date, making it the second highest grossing horror film in the U.S. over the past decade. The film has so far earned more than $332 million at the worldwide.
“In the quarter, Viacom concluded a strong advertising upfront that combined robust price increases, as well as improved packaging that included increased demand for our advanced marketing solutions,” continued Bakish. “Additionally, we continued to diversify our business with growth in worldwide live event attendance and the expansion of a cross-company studio production initiative that leverages our sizable creative assets and global capabilities to drive incremental opportunities.”
Bakish concluded: “This improvement in operating performance –combined with meaningful actions over the past 18 months to de-lever our balance sheet –have resulted in a stronger credit profile to help support Viacom’s return to long-term sustainable growth. We remain focused on building this momentum with an even stronger September quarter as we continue to position Viacom for the future.”
Shares of Viacom were up slightly to $28.75 in pre-market trading on Thursday. They closed at $28.62 on Wednesday, down from the $29.12 it opened with. The market opens for regular trading at 9:30 a.m. ET.
Viacom will hold a conference call at 8:30 a.m. ET to discuss the results.