| MUMBAI:
US media conglomerate Viacom has reported results for the first quarter ended
30 March 2009. Revenues
for the first quarter of 2009 totaled $2.91 billion, a decline of seven per cent,
primarily reflecting a
4-percentage point negative impact from foreign currency
exchange as well as lower ancillary and advertising revenues. Media
Networks and Filmed Entertainment segment revenues were down by eight and five
per cent respectively. Operating income of $442 million declined 22 per cent as
a result of lower year-over-year revenues, which more than offset an $87 million
net reduction in expenses in the quarter. Net earnings attributable to Viacom
were $177 million, down 34 per cent. Viacom
executive chairman Sumner M. Redstone said, "The global economy continues
to present significant challenges for all businesses, including those in the entertainment
industry. Viacom is successfully navigating these uncertain waters by taking full
advantage of our financial strength to invest in great content and to build on
our enduring global brands." Viacom
president CEO Philippe Dauman said, "During the first quarter, we further
reduced our debt, generated seasonally strong cash flow and aggressively managed
our costs while continuing to invest in our future with new programming and strategic
partnerships." Media
Networks revenues were down by eight per cent to $1.87 billion, principally due
to a 37 per cent decline in ancillary revenues. This reflected a challenging comparison
to the particularly strong initial sales of the music video game Rock Band
in the first quarter 2008 as well as a soft retail environment overall. Ad
revenues in the US decreased by nine per cent with worldwide ad revenues down
by 11 per cent including foreign currency exchange impact as continued softness
in the overall advertising market dampened ad sales. Affiliate revenues showed
continued strength in the first quarter with growth of 13 per cent on a worldwide
basis, including a three-percentage point benefit from certain domestic affiliate
revenues that are not expected to continue in the future. Foreign currency exchange
had a two-percentage point negative impact on Media Networks revenues overall.
Filmed Entertainment revenues decreased by 5 per cent including a seven-percentage
point negative impact from foreign currency exchange. Theatrical
revenues were up by 15 per cent, driven by strong domestic box office performance.
Home entertainment revenues were down nine per cent. This result reflects softness
in the overall retail sector, as well as the overlap of $29 million in revenue
recognized in the first quarter of 2008 in connection with the conclusion of an
HD-DVD exclusivity arrangement and fewer titles released year-over-year, which
were partially offset by the strong performance of DreamWorks Animation's Madagascar:
Escape 2 Africa. A nine per cent decline in television license fees was driven
by the number and mix of available titles. First
Quarter 2009 operating income decreased by 22 per cent to $442 million compared
with $567 million in the first quarter of 2008. The first quarter 2009 results
include an $87 million net reduction in total expenses, including approximately
$50 million in cost savings related to the Company's fourth quarter 2008 restructuring
activities. The
film segment had an operating loss of $123 million. This loss reflects higher
print and ad expenses associated with the late March release of DreamWorks Animation's
Monsters vs. Aliens, the absence of income recognised in the prior year
in connection with the conclusion of an HD-DVD exclusivity arrangement and fewer
home entertainment titles released versus the prior year.
Media
Networks operating income declined by nine per cent to $629
million, reflecting the impact of lower ancillary and advertising
revenues as well as a three per cent increase in programming
expenses, which more than offset the benefit of lower expenses
and higher affiliate revenues.
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