Viacom Misses Q4 Revenue Forecast With 20 Percent Box Office Drop

TV side helped offset a small portion of those losses, despite down domestic ad sales and ratings

philippe dauman viacom
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Viacom whiffed on Wall Street’s overall sales forecast for its fiscal fourth quarter 2015, with its decline pegged principally to a 20 percent lower box office compared to last year. The TV side helped offset those year-over-year losses a hair, despite lowered domestic ad sales.

Overall, Viacom reported $3.79 billion in revenue for its fiscal fourth quarter 2015, resulting in an adjusted $1.54 earnings per share (EPS). Wall Street had forecast EPS of $1.55 on $3.88 billion in revenue, per Yahoo Finance. Zacks saw the earnings coming in three cents lower per share.

The Filmed Entertainment optics look particularly bad because Viacom had nothing to match the success of “Transformers: Age of Extinction” from Q4 in 2014.

Quarterly revenues dropped 5 percent this year overall, as a 24 percent Filmed fall was partially offset by a 5 percent Media Networks growth. The TV side’s sales rose on higher domestic affiliate fees — up 15 percent — and international ad sales.

Stateside, that advertising didn’t fare as well, dropping 7 percent on lowered TV ratings. To be fair, the 7 percent decline is better than the prior quarter’s.

Overall, national advertising this quarter has been a nice surprise for the majority of major media companies.

There are some positives to take out of Viacom’s bigger picture as the company’s fiscal 2015 ended on Sept. 30. Viacom’s full-year adjusted EPS reached a record $5.44 as Media Networks hit an all-time revenue high of $10.49 billion.

Executive chairman Sumner Redstone and President/CEO Philippe Dauman were sure to tout progress in their prepared remarks.

“Viacom continues to create some of the most compelling and entertaining content in the world. I am confident that Viacom’s leadership team will continue to lead through our industry’s period of transition and succeed well into the future,” Redstone said.

“Viacom’s fourth quarter and year-end results are indicative of our progress in key areas, including recent ratings improvement and renewals of important distribution agreements,” Dauman (pictured above) stated. “Our strategy of increasing and accelerating investment in original content and expanding our profitable international footprint are among the major factors driving this success, which we believe will continue in 2016 and beyond. We are making great progress in tackling industry-wide inefficiencies in audience measurement, while expanding our audience reach with landmark distribution agreements.”

“Viacom’s family of Media Networks are the most watched by highly coveted younger audiences, and we are building engagement on all platforms, leading to first-of-their-kind marketing opportunities with our advertising partners,” he continued. “Our investment in content continues to grow, supporting an unprecedented amount of quality original programming and a more robust slate of films.”

Dauman closed on an overseas note: “In addition, in fiscal 2015 we launched 21 channels overseas — including six in India — fueling the fastest international growth in our history.”

During the quarter, Viacom’s Comedy Central re-launched “The Daily Show” with new host Trevor Noah. In August, the company declared a $0.40 stock dividend, something Viacom repeated on Wednesday. VIAB stock closed yesterday at $49.35 — up $0.95, or 1.96 percent.

Last quarter, Viacom made its EPS mark but missed on revenue as lowered TV ratings hurt ad sales.

Viacom executives will lead a conference call at 8:30 a.m. ET to discuss the quarterly and annual results.

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