Mixed results meet Wall Street's expectations
HOLLYWOOD — The movies did it this time.
Both Sony and Viacom reported less-than-stellar quarterly results last week due to duds like “Gigli” and “Lara Croft Tomb Raider: The Cradle of Life.”
In Viacom’s case, the mixed results broadly met Wall Street’s expectations, but Sony swung to an eye-popping $42 million loss, thanks largely to a writedown for the ill-fated Jennifer Lopez/Ben Affleck starrer “Gigli.”
Two other pics from Joe Roth‘s Revolution Studios — “Tears of the Sun” and “Hollywood Homicide” — as well as Columbia’s own “Basic” and “The Medallion” also dented Sony’s perf.
The loss is all the more bitter given that at this time last year, Sony Pictures was setting records and spinning gold from “Spider-Man.”
The loss contributed to a 25% plunge in Sony’s total net profit, which fell to $297 million. Revenue was flat — up 0.4% — at $16.2 billion for the three months ended Sept. 30. (That was Sony’s second quarter, as its fiscal year ends in March.)
“Gigli” and company negated gains from theatrical releases like “Bad Boys II” and “S.W.A.T.,” homevid coin from “Anger Management” and “Daddy Day Care” and initial syndie sales of “The King of Queens.”
To be fair, losses from “Gigli” in no way compare to the windfall from Spidey, and the studio would have had a hard time matching its year-earlier numbers under any circumstances.
Movies, unfortunately, are not the only sore point for Sony: The troubled Japanese conglom has suffered setbacks in its electronics and games divisions and is undergoing a massive restructuring. The overhaul includes the loss of 300-500 jobs at Sony Pictures.
Viacom is by no means in such a leaky boat, though a string of so-so pics — “The Core,” “The Hunted,” “Marci X,” “Rugrats Go Wild!” and “Dickie Roberts: Former Child Star” — chipped away at the company’s overall performance.
Viacom execs pointed to higher ad costs for movies as largely to blame for the precipitous 24% drop in third-quarter operating income to $112 million at the Entertainment division, which also includes TV production. For the first nine months of the year, Entertainment profits are off by 32%.
Still, not all the news at Viacom was bad: Company could revel in double-digit earnings gains at its cable nets, TV broadcasting and video retail groups.
Total revenues were up a modest 5% to $6.6 billion for the three months ended Sept. 30 compared with the same period last year . Net earnings were $700 million, a 9% gain over last year’s third quarter.
Not surprisingly, Viacom prexy-CEO Mel Karmazin promises that “2004 will be a break-away year,” reiterating boss Sumner Redstone‘s similar pledge to investors. (Ads on the Super Bowl are already mostly sold out, and it’s an election year.)
As for upcoming Par features, Karmazin touted releases of two remakes, “The Manchurian Candidate” and “Stepford Wives,” along with Nick’s first “SpongeBob” movie.
Over at Sony, execs are banking on a holiday sked including “The Missing,” “Big Fish,” “Something’s Gotta Give” and “Mona Lisa Smile,” starring Julia Roberts.