Viacom (VIAB) Stepping up Investment in Films, Needham & Company Notes

Needham & Company analyst Laura Martin trimmed estimates on Viacom (NASDAQ: VIAB) and maintained a Hold rating following mixed Q4 results this morning. Martin noted the company is stepping up its investment in films.

Martin commented, "VIAB reported FY4Q15 revenue of $3.79B (down 5% y/y and 2% below our estimates), and Operating EPS of $1.54 (down 10% y/y and 1% above our estimate). Channel 5 aided results. Comments we liked best included $1.5B of shares repurchased in FY15, higher SVOD pricing through Hulu, more original TV productions being sold to 3rd parties, and higher ratings at 6 of VIAB’s top 10 networks. Comments that made us more cautious included: 1) ramp up in film investment at Paramount, Viacom’s lowest margin business, in FY16; 2) a goal of tripling Vantage clients (from 11 to 33 advertisers) by next May’s upfront, which we worry shifts risk to VIAB and away from advertisers; 3) lower ad loads; and 4) DISH affiliate renewal uncertain."

The firm maintained a Hold rating and lowered FY 2016 EPS estimates from $5.95 to $5.92.

For an analyst ratings summary and ratings history on Viacom click here. For more ratings news on Viacom click here.

Shares of Viacom closed at $49.35 yesterday.

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