Viacom revenue misses expectations as ad sales fall
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A security guard speaks into a microphone in his sleeve as he stands outside the Viacom Inc. headquarters in New York April 30, 2013. REUTERS/Lucas Jackson/File Photo
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By Jessica Toonkel and Anya George Tharakan
(Reuters) - Viacom Inc (NASDAQ: VIAB), the owner of MTV, Comedy Central and Nickelodeon, reported lower-than-expected quarterly revenue on Wednesday, weighed down by a decline in domestic advertising sales and the absence of hits from its Paramount film studio.
Domestic advertising revenue at the New York-based company fell 8 percent in the fourth quarter ended on Sept. 30, the ninth consecutive quarterly decline.
Analysts on average had expected a 7.8 percent fall, according to market research firm FactSet StreetAccount.
Viacom's shares were down 1.1 percent in morning trading.
The company, which has been struggling to turn around ratings and a decline in ad revenue, faces uncertainty after Chief Executive Officer Philippe Dauman was forced to resign in the wake of a bruising public battle with controlling shareholders Shari and Sumner Redstone.
Following Dauman's exit in August, the Redstones, who own 80 percent of voting shares of both CBS Corp (NYSE: CBS) and Viacom, pushed the companies to consider merging. Both have formed special committees of their directors to explore the idea.
On a conference call with analysts, Viacom interim CEO Tom Dooley, who steps down on Tuesday, said the board's exploration of a merger with CBS was ongoing.
Many investors and observers expect the two to merge, with CBS CEO Leslie Moonves at the helm.
Earlier this month, Viacom said Bob Bakish, who heads its international business, would replace Dooley as acting CEO.
On the call, Bakish thanked the board, especially the Redstones, and outlined where he saw opportunities to turn Viacom around, particularly through further growth of its international business.
Kern Schireson, executive vice president of data strategy and consumer intelligence, talked about the potential to further increase Viacom's business by sharing data with advertisers to better target viewers.
Executives said they expected domestic affiliate revenue to increase at a low-single-digit percentage rate this year.
Viacom's total revenue fell 14.8 percent to $3.23 billion from a year earlier. Analysts on average were expecting $3.30 billion, according to Thomson Reuters I/B/E/S.
Net profit attributable to Viacom plunged 71 percent, but earnings before special items beat the analysts' average estimate.
Revenue from Viacom's film business fell 24.5 percent to $774 million from a year earlier, when "Mission: Impossible - Rogue Nation" had a strong international performance.
Viacom executives were optimistic about turning around Paramount's performance. Dooley said "Transformers: The Last Knight" would be one of next summer's biggest movies.
(Reporting by Jessica Toonkel in New York; Anya George Tharakan in Bengaluru; Editing by Lisa Von Ahn)
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