Viacom, the troubled entertainment conglomerate, said Wednesday that its fourth quarter profit declined significantly as the company faced the perfect storm of advertising and affiliate revenues declines at home and abroad while Paramount Pictures recorded a $137 million loss for the quarter.
For its fiscal fourth quarter, Viacom said revenue fell 15% from the year-ago period to about $3.23 billion, from nearly $3.79 billion, as advertising revenue fell across its operations. Net income came to $252 million, or 63 cents per share, compared with $884 million, or $2.21 a share in the year-earlier period, marking a decline of 71%.
In a statement, Tom Dooley, Viacom’s interim chief executive, said the company had begun to see some ratings stabilization at some of its TV networks and was building a more robust slate of films at Paramount. “With new leadership across the company, continued investments in new content, technologies and targeted acquisitions, and an expanded Board of Directors, I have great confidence in Viacom’s next phase, as the company explores the exciting possibilities ahead,” Dooley said in a prepared statement.
Viacom is in the midst of considering whether it should merge with CBS Corp. Both companies are controlled by the Redstone family through the movie-exhibition company National Amusements Inc. Dooley is expected to step down from his post in a few days, and replaced by Bob Bakish, who has been head of the company’s international businesses. The company has suffered as the younger viewers who are the primary audience for its collection of TV networks have gravitated toward new technologies including mobile devices and streaming video, which are not as easily monetized by advertising and subscription agreements. There has also been concern about the quality of the programming at some Viacom networks. On Tuesday, Sony Corp. said it would drop Viacom offerings from its Playstation Vue streaming-TV service in favor of other content options.
In remarks made during a Wednesday conference call, Dooley declined to speak extensively on the CBS merger considerations, but said Viacom would continue to operate with its own future in mind as it considered strategy. Dooley cited performance at the company’s Nickelodeon kids’ networks as well as viewership upticks for Comedy Central late-night host Trevor Noah as bright spots at the company.
In the U.S., ad revenue fell 8%, the company said, while ad revenue from international operations fell 7%. Domestic and worldwide affiliate revenues fell 19% and 16%, respectively, the company said, owing to comparisons with the year-earlier period, which contained money from deals with subscription-video-on-demand companies. International affiliate revenues increased 7%.
Revenue from filmed entertainment fell 24% to $774 million, owing to lower revenue from movie releases and better performance in the year-earlier period due to the release of “Mission: Impossible – Rogue Nation.” Media networks revenue dropped 11% to $2.48 billion.
Given all the comings and goings in Viacom’s executive suite during the past few months, it’s no surprise the company also recorded a $206 million loss for restructuring and programming impairment charges.