Viacom earnings fall on lower revenue and streaming investments
Viacom’s profit fell in the last quarter of its fiscal year as lower revenue and increased investment in new online streaming services weighed on its bottom line.
Profit at the media company — whose portfolio includes TV Land, VH1 and MTV — fell 22% from a year earlier to $307 million. Per share earnings slid to 76 cents a share, down from 98 cents a share.
On an adjusted basis, profit totaled 79 cents a share, down from 99 cents a share a year earlier. Analysts polled by FactSet were expecting 76 cents a share in adjusted earnings.
Revenue was $3.43 billion, down 1.5%, but still slightly higher than analysts’ consensus estimate. Total expenses rose 2.3%.
The company said the biggest factors in decreased profitability were investments in Pluto TV, its advertising-supported streaming service and one-time marketing expenses for the launch of BET+, a subscription video service launched earlier this year. Also on the call, Bakish announced that Pluto TV has reached 20 million monthly active users.
Revenue at the company’s Paramount movie studio decreased 72% to $94 million, largely the result of a comparison to last year’s summer blockbuster “Mission: Impossible-Fallout.”
On an earnings conference call Thursday, Viacom CEO Bob Bakish said that the Paramount movie studio was profitable for the first time in four years, thanks in part to increased licensing and production deals with major video-streaming companies. Bakish said that Paramount licensed the rights to “Beverly Hills Cop,” the 1984 action comedy film starring Eddie Murphy, to Netflix.
On Wednesday, Viacom announced that it struck a deal with Netflix to provide new content from its Nickelodeon Animation Studio based on some of its most popular characters, including SpongeBob SquarePants.
Both deals with Netflix are in keeping with Viacom’s strategy to feed major streaming services rather than attempting to build rival general-interest subscription streaming services in-house.
Also on the call, Bakish said the company returned to full-year growth for its U.S. advertising and U.S. affiliate sales businesses, two of its most important revenue streams.
Viacom is combining with CBS, and both media companies have been consolidating some of their operations. CBS reported earnings earlier this week and logged lower profit, hurt by merger costs and higher programming expenses. Wall Street hasn’t reacted well to the merger, with Viacom and CBS shares down more than 20% since the August announcement.
Bakish said on the call that Viacom and CBS planned to close their merger in early December and are drafting plans for the combined company. He said the new company plans to combine its affiliate sales teams and come up with a cohesive plan for its direct-to-consumer streaming services.
The Paramount movie studio was profitable for the first time in four years, said Viacom President and CEO Bob Bakish, thanks in part to increased licensing and production deals.