Share Name Share Symbol Market Type
Viacom Inc. NASDAQ:VIA NASDAQ Common Stock
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  +$0.35 +0.99% $35.70 $32.30 $40.00 $35.85 $35.30 $35.30 42,549 01:00:00

Slumping Ad Sales Weigh on Viacom -- WSJ

10/08/2018 8:02am

Dow Jones News

Viacom Inc. (NASDAQ:VIA)
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By Allison Prang and Keach Hagey 

This article is being republished as part of our daily reproduction of articles that also appeared in the U.S. print edition of The Wall Street Journal (August 10, 2018).

Viacom Inc.'s revenue declined in the latest quarter as lower international sales from its filmed entertainment division, which includes Paramount Pictures, and advertising sales weighed on its top line.

Revenue at Viacom, the provider of television channels including MTV and Nickelodeon, fell 3.8% from the comparable quarter a year ago to $3.24 billion. Analysts polled by Thomson Reuters expected revenue of $3.27 billion.

Viacom's media networks segment revenue fell 2% to $2.5 billion. Filmed entertainment revenue fell 9% to $772 million, driven in part by lower sales from theaters, licensing and home entertainment outside the U.S. The year-earlier period featured the releases of "Transformers: The Last Knight" and "Ghost in the Shell."

Viacom has been working to turn around its operations as it has dealt with consumers moving away from cable TV subscriptions and lackluster film releases.

Bolstered by the box office performances of films such as "A Quiet Place" and "Book Club," the filmed entertainment segment's adjusted operating profit rose to $44 million in the latest quarter from $9 million a year earlier.

Viacom is also pointing to early successes from its blockbuster "Mission: Impossible -- Fallout," which made its debut in the current period. In its first two weeks, Paramount's "Fallout" grossed almost $330 million, the largest opening among the six films in the Mission Impossible series, Viacom said.

Cord-cutting has hit how much money Viacom generates from advertising sales and fees from distributors for its programming.

Domestic advertising at Viacom fell again in the third quarter, dropping 3% to $922 million. However, the company said the metric improved from the prior quarter, helped by higher prices. Viacom has said it expects domestic ad revenue to return to growth in its fourth quarter.

Domestic affiliate revenue fell 3% to $978 million, while International affiliate revenue fell 2% to $175 million.

However, Viacom executives predicted that domestic affiliate revenue would return to growth in the September quarter for the first time in more than a year, driven by rate increases and the growth of streaming pay-TV bundles. They also expect domestic affiliate growth would continue going into 2019.

"The decline in the Viacom stock price, as I look at the charts over the last two years, was fundamentally tied to negative news in affiliate," said Viacom Chief Executive Bob Bakish on a call with analysts. "And what you're seeing here is us coming up the other side of that, through strategy, through relationships, through product."

Shares of Viacom were up nearly 7% in mid-morning trading.

Viacom's profit fell 24% to $522 million, or $1.29 a share. On an adjusted basis, the company reported earnings from continuing operations of $1.18 a share, up from $1.17 a share a year ago. Analysts were expecting adjusted earnings of $1.07 a share.

The company's year-ago quarterly profit included $285 million from a gain on the sale of Epix, a pay-TV network.

Write to Allison Prang at and Keach Hagey at


(END) Dow Jones Newswires

August 10, 2018 02:47 ET (06:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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