Film studio squeezes quarter; advertising sales down 6%
Viacom may be poised for a turnaround as Nickelodeon improves rapidly and a soft December quarter segues into an advertising rebound later this year, said CEO Philippe Dauman.“Based on what we see today,” ad sales for the current quarter across the company’s stable will be nearly flat and start to grow after that, Dauman told analysts Thursday on a conference call to discuss quarterly earnings, which saw a 6% drop in U.S. advertising sales. He blamed the dip entirely on Nickelodeon. Wall Street liked that dash of clarity and a ring of confidence from management, which had been caught badly off guard when Nick ratings took a nosedive in late 2011. The stock closed up 1.61% at $63.18 in a flat market. Revenue for Viacom’s fiscal first quarter ended in December fell 16% to $3.3 billion. Net profit more than doubled to $470 million from $212 million on one-time costs the year before. Without those, income was down 22%, it said. Media networks revenue eased 2% to $2.4 billion. Profit fell 9% to just over $1 billion. Both domestic and international ad sales fell 6%. Domestic affiliate revenues increased 4%. Worldwide fees rose 3%. Dauman thinks markets have calmed from last quarter’s fiscal cliff jitters, with heightened confidence in the U.S. economy and more stability in Europe seen for 2013. He’s seeing scatter rates up in the mid-teens vs. the last upfront and up mid-single digits from last year’s scatter prices. He’s has been talking about Nick, and retooling it, for a year. On Thursday, he focused on MTV (and announced another big hire from ABC Family to run scripted programming.) He said it had been way too dependent on one night and one show. Now “Catfish,” “Washington Heights,” “Buckwild,” “Teen Mom” and “Snooki & Jwoww” are “starting to answer the question what’s after ‘Jersey Shore’?” In film, he said Paramount’s new animation division will soon announce a second pic for 2015 to follow the untitled “SpongeBob SquarePants” movie, based on an original concept and “toyetic” — meaning expect consumer product tie-ins. Par’s animated features will cost $100 million or below, he said. Studio losses narrowed to $139 million from $31 million on the timing and mix of releases — including tough comps against “Mission Impossible — Ghost Protocol” the year before and one homevideo release vs. four. Revenue fell 37% to $975 million. Theatrical was down 42% to $328 million, home entertainment fell by 43%, television license fees by 24% to $227 million. Execs touted upcoming tentpoles “G.I. Joe: Retaliation,” “Pain & Gain,” “Star Trek Into Darkness” and “World War Z.”
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