Viacom Q3 profit, revenues down due to slowdown

Viacom Q3 profit, revenues down due to slowdown


MUMBAI: The weak ad environment caused by the economic slowdown is starting to hit the bottom line of Viacom. The US media conglomerate has reported a fall in its profit and revenues.

While profit fell by seven per cent, revenue decreased 14 per cent to $3.24 billion, driven primarily by the mix of film titles and lower ad revenues. Adjusted operating income was $903 million in the quarter, down nine per cent, reflecting the overall decline in revenues, partially offset by lower expenses.

Adjusted net earnings from continuing operations attributable to Viacom declined by 12 per cent in the quarter to $512 million, and adjusted diluted earnings per share from continuing operations decreased by two per cent to $0.97 per diluted share.

The comparison with 2011 was impacted by the fact that Viacom?s 2011 third quarter included substantial timing benefits from major films and television event programming, as well as digital distribution agreements.

Viacom executive chairman Sumner M. Redstone said, "We continue to develop outstanding creative content on every platform while efficiently executing Viacom?s strategy. We are confident that Viacom?s unrivaled portfolio of powerful brands will continue to grow and evolve over the long term as we entertain and inspire new audiences around the world every day."

Viacom president, CEO Philippe Dauman said, "Despite challenging year-on-year comparisons with last year?s strong third quarter, Viacom remains committed to pursuing its long-term strategy of international expansion, continued programming investment and ongoing focus on operational discipline. Viacom continues to bring cultural powerhouses to fans around the world, and we are aggressively investing in our brands to create new hits, like Workaholics and Legend of Korra, now the most watched kid?s program on cable in the quarter. Paramount also continued to strengthen its platform by aligning its slate to provide upcoming releases with the best possible opportunity to succeed in the global marketplace."

Quarterly revenues of $3.24 billion decreased from $3.77 billion in the prior year. Media Networks revenue declined 5 per cent to $2.27 billion, driven by lower advertising and ancillary revenues.

Domestic advertising revenues decreased 7 per cent, impacted by the timing of event-driven programming compared with the prior year?s quarter. Worldwide advertising revenues decreased 9 per cent in the quarter.

Domestic affiliate revenues decreased 1 per cent, reflecting the significance of digital affiliate revenues in the same quarter last year. Excluding the impact of digital distribution arrangements, domestic affiliate revenue growth rate was in the high-single digits. Worldwide affiliate fees increased 1 per cent.

Film revenues were down 29 per cent to $1.01 billion. Worldwide theatrical revenues decreased by 52 per cent in the quarter to $283 million, reflecting the number and mix of the company?s current quarter releases. During the quarter, Paramount released three films,DreamWorks Animation?s ?Madagascar 3: Europe?s Most Wanted?, ?The Dictator? and ?Titanic 3D?. In the comparable period of 2011, Paramount released four films: DreamWorks Animation?s ?Kung Fu Panda 2?, Marvel?s ?Thor?, ?Super 8? and ?Transformers: Dark of the Moon?.

Worldwide home entertainment revenues declined by eight per cent in the quarter, driven by the mix of available titles, and worldwide television license fees decreased by 24 per cent reflecting both the number and mix of titles. Worldwide ancillary revenues increased by 44 per cent to $104 million in the quarter, driven by higher digital revenues.

Adjusted operating income decreased 9 per cent to $903 million in the quarter. Media Networks adjusted operating income declined $99 million, reflecting lower overall revenues, partially offset by a decrease in expenses. Filmed Entertainment adjusted operating income decreased $3 million, reflecting the revenue decline, substantially offset by lower expenses. Corporate expenses decreased $15 million, principally reflecting lower variable compensation costs.

Quarterly adjusted net earnings from continuing operations attributable to Viacom decreased $71 million, or 12 per cent, in the quarter ended 30 June, 2012, principally due to the decline in adjusted operating income. Adjusted diluted earnings per share from continuing operations for the quarter were $0.97, a decrease of $0.02 from the prior year?s comparable quarter.

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