Viacom Q4 Earnings Miss the Mark as MTV, Comedy Central Home Shed Cable Subscribers

Paramount’s box office also compares unfavorably to last year’s “Star Trek Beyond”-carried quarter

Viacom grew its top and bottom-line financials for both the fourth-quarter and full-year 2017, but the company’s disbursed profit for its most recent three months wasn’t enough to satisfy Wall Street’s short-term plan. Blame the falling-through of its film-financing deal with China’s Huahua for much of that.

You see, media analysts had forecast Q4 earnings per share of 86 cents on $3.23 billion, per a Yahoo Finance poll. Viacom actually reported 77 cents per share on $3.32 billion — so the home to Paramount Pictures, MTV and Comedy Central raked in a higher overall revenue than predicted, but ended up with lower net income per share versus the early estimates.

A week ago, Viacom disclosed a $59 million expense associated with the now-dead $1 billion funding deal with the Chinese company. News of that big cost and lost opportunity came out too late to be considered for at least some analysts contributing to the 86-cent consensus.

Zooming out a bit, part of the problem at Viacom continues to be cord-cutting. The company’s revenue would have been even better had it not been for lost cable subscribers. While Viacom certainly isn’t alone in this battle — just ask Disney’s ESPN — it has one of the more susceptible channel lineups when it comes to skinny bundling.

Back to the big screen, Paramount had a forgetful quarter at the box office, which was magnified when compared to the final quarter of fiscal 2016. Last year’s comparable 90-day period housed “Star Trek Beyond” — Viacom’s Filmed Entertainment segment simply had nothing this summer to maintain that momentum.

“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,” Viacom president and CEO Bob Bakish said in a statement accompanying the Q4 and full-year financials. “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,” he continued. “We realized these achievements and established a stable base while reducing debt, improving free cash flow and strengthening our balance sheet.”

Shares of VIAB closed Wednesday at $24.61, up 7 cents on the day. The U.S. stock market opens at 9:30 a.m. ET.

Viacom executives will host a conference call at 8:30 a.m. ET to discuss the quarter and full fiscal year in greater detail.