BENGALURU: Viacom Inc (Viacom) reported 2.5 percent year-on year (YoY) drop (reduced by $77 million) in revenue for the quarter ended 31 March 2016 (Q2-2016, current quarter) at $2,381 million as compared to $2,452 million in Q2-2015. Revenue for the company’s Media Networks segment declined 2.9 percent YoY in the current quarter to $2,381 million from $2,452 million in the corresponding year ago quarter. Filmed Entertainment segment revenue declined 0.6 percent YoY to $655 million from $659 million in Q2-2015.
Adjusted operating Income in the current quarter declined 29 per cent to $586 million from $822 million in Q2-2015. Media Networks adjusted operating income in Q2-2016 decreased 11 per cent to $805 million from $903 million in Q2-2015, reflecting revenue declines as well as an increase in programming expenses. Filmed Entertainment adjusted operating loss was $136 million, driven by the performance of certain films released in the quarter.
Quarterly adjusted net earnings attributable to Viacom decreased to $303 million. Adjusted diluted earnings per share for the quarter were $0.76.
A common trend across a number of media and entertainment verticals in the US for the quarter that ends 31 March is that revenues are at the lowest. In general as per this cycle, revenue can only go up from here for the other quarters if a business has a normal year. In the case of Viacom Inc., 31 March corresponds to the close of the second quarter of its fiscal, since the company’s financial year ends on 30 September.
Viacom, executive chairman, president and chief executive cfficer Philippe Dauman, said, “Viacom’s brands are among the most popular and culturally connected in the world. Nickelodeon remains the number one network for kids and many of our other networks have shown sequential improvements in ratings and consumption across platforms. The continuing strength of our brands was validated by our recent renewals with Dish and Frontier on attractive terms. In the past year, we have successfully closed long-term carriage agreements with domestic distributors representing more than 44 million subscribers. Around the world we continue to expand the global reach of our networks, launching several new channels in the quarter. At Paramount, we are looking forward to upcoming blockbusters Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond this summer.”
“We are responding to industry consumption shifts with innovative, thoughtful, and long-term strategic solutions and are generating meaningful results in many important areas, including content creation, data-based audience measurement and distribution innovation. There is much more work to be done, but we see the path to growth ahead and are very optimistic about our future,” he added.
Media Networks
This segment’s revenue and results have been mentioned above. Viacom says that domestic advertising revenues decreased 5 per cent, as pricing increases were more than offset by softer ratings at some of its networks. International advertising revenues declined 1 per cent, driven by a 7 per cent adverse effect of foreign exchange. Absent the impact of foreign exchange, international advertising revenues increased 6 per cent, driven principally by growth in Europe. Domestic affiliate revenues decreased 2 per cent, reflecting a modest decline in subscribers and a previously disclosed rate adjustment with a major distributor partially offset by rate increases across the remaining subscriber base. International affiliate revenues increased 4 per cent, driven by new channel launches, increased subscribers, and rate increases. Absent a 7 per cent adverse impact of foreign exchange, international affiliates revenues increased 11 per cent.
Filmed Entertainment
Filmed Entertainment revenues mentioned above decreased as an increase in license fees and theatrical revenues was more than offset by declines in home entertainment and ancillary revenues. The company says that excluding foreign exchange, which had a 2 per cent unfavourable impact, worldwide revenues increased 1 per cent. Worldwide theatrical revenues increased 6 per cent to $217 million in the quarter, reflecting revenues from Daddy’s Homeand The Big Short, both released late in the first fiscal quarter. License fees increased 17 per cent to $240 million in the quarter, driven by the licensing of certain titles for subscription video-on-demand services. Worldwide home entertainment revenues decreased $41 million in the quarter, primarily reflecting lower revenues associated with catalogue and third-party distribution titles.
