Viacom profit declined 60 per cent in its fiscal second quarter as the owner of Nickelodeon, MTV and the Paramount Pictures film studio grappled with the costs of its turnaround plan, more expensive programming fees and an ongoing decline in US advertising sales.
Net income attributable to the company in the first three months of this year fell to $121m, or 30 cents a share, from $303m, or 76 cents a share, a year ago, hit by $280m in restructuring and programming charges.
Stripping out those charges and certain other items, adjusted net earnings attributable to Viacom rose 5 per cent to $317m. Adjusted earnings of 79 cents per share came in ahead of analysts’ forecasts of 59 cents.
Revenue also came in higher than expected, rising 8 per cent to $3.26bn from $3bn a year ago, compared with analysts’ estimates of $3.03bn. Sales were boosted by a strong performance at Paramount, growth in at international networks and an increase in the affiliate fees charged to carry its cable channels.
Media networks revenue edged up 1 per cent to $2.39bn, as higher affiliate fees offset a 4 per cent drop in domestic advertising sales.
Paramount revenues surged 37 per cent to $895m, as the film studio reported gains in box office, licensing and home entertainment revenues.
“There is a lot of work still to do, but we are making important changes at Viacom, taking substantial strides towards revitalizing our portfolio of brands and returning the company to consistent top-line growth,” said Bob Bakish, chief executive.
Viacom shares rose 2.9 per cent in pre-market trading in New York.
Mr Bakish, who became chief executive last year, is trying to reverse the shrinking audiences and advertising sales that have sapped the company’s profits and share price.
The company is focusing on a core group of channels and has installed new management at Paramount in the form of former 20th Century Fox boss Jim Gianopulos. The aim is to create sustainable movie franchises that can return Paramount to health after years of flops.
Viacom, which is controlled by the billionaire Sumner Redstone and his daughter, Shari, recently explored a merger with CBS, the US television company they also control, although the talks did not yield a deal.