Viacom Inc. said net income in its fiscal fourth quarter fell as revenue slumped overseas and stayed flat with year-earlier results at its U.S. operations, even as the company showed improvement at its movie unit and notched gains in the money it gets from cable distributors.
The New York owner of MTV, Nickelodeon and the Paramount movie studio said profit in the period came to $386 million, or 96 cents a share, compared with $674 million, or $1.67 a share, in the year-earlier quarter. Excluding one-time items, Viacom said adjusted earnings came to $400 million, or 99 cents a share.
The results topped Wall Street expectations, which had called for earnings of 95 cents a share.
The company said revenue in the period increased 5%, to nearly $3.49 billion from nearly $3.32 billion.
But revenue in its biggest unit, its cable operations, fell 1% to $2.52 billion, largely on a 13% dip in advertising in overseas markets and a 4% shortfall in ad sales in the United States. Revenue from distribution, however, increased 4%, thanks to a 3% improvement in the U.S. and an increase of 10% in overseas markets. Viacom has worked to boost the money it gets from cable and satellite systems. In its first fiscal quarter, U.S. distribution revenue was down 8%.
Viacom’s film operations were more robust, producing a 25% increase in revenue, to $984 million. The company cited the performance of films like “Mission Impossible – Fallout,” “A Quiet Place,” and “Book Club” as factors in the performance. Paramount Television saw new revenue from programs produced for outside vendors, such as “Maniac” for Netflix and “Tom Clancy’s Jack Ryan” for Amazon.
In a statement, Viacom CEO Bob Bakish cited improvements in distribution revenue and at Paramount as signs of a turnaround in the company’s performance. Many media companies have suffered as younger consumers migrate from linear TV to new forms of video entertainment delivered via digital means, but Viacom has been hit particularly hard, as many of its cable networks skew toward kids, teenagers and young adults. ” We successfully turned around our core business, with dramatic improvements across our networks, at Paramount and in distribution,” Bakish said. “As we head into 2019, we are excited about the company’s evolution and expect to return to topline growth.”
During a conference call with investors, Viacom executives played up performance at Paramount and its filmed-entertainment operations, citing performance from the latest “Mission: Impossible” franchise as well as new production deals with outside entities. “We’re also exploring various new revenue streams in addition to our traditional theatrical releases as a producer of first-run films and television for other media platforms. Our first such partnership is with Netflix on a multi-picture deal,” said Jim Gianopulous, chairman and CEO of Paramount, during the discussion. He said the pact would generate “incremental” revenue.