August 21, 2019

Viacom Beats Wall Street Estimates With Q4 Paced By Paramount

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Viacom put an exclamation mark on earnings season and its fiscal year with fourth-quarter results that beat Wall Street estimates and proved a turnaround at Paramount Pictures. Media networks, however, offered a less rosy snapshot of the companys progress.

Earnings per share declined 43% from the year-ago period but came in at 96 cents, a penny ahead of estimates. Revenue increased 5% to just shy of $3.5 billion, ahead of analysts projection of $3.37 billion.

Paramount piled up $984 million in revenue in the period ending September 30, a 25% jump from the same quarter a year ago. Operating profit came in at $38 million, compared with effectively no profit in the last quarter of fiscal 2017. The performance of Mission: Impossible – Fallout, A Quiet Place and Book Club across windows helped the studio notch a seventh straight quarter of year-over-year gains in adjusted operating income.

On the TV side, Paramount continued to supply notable series like Maniac on Netflix and Tom Clancys Jack Ryan on Amazon Prime, helping full-year revenue rise 127% to more than $400 million. The company said it expects to deliver 16 series in fiscal 2019, up from nine in 2018, with revenue growth of 50%.

At Viacoms media networks, home to flagships like Nickelodeon and MTV and the foundation of the overall business, the picture was less bright. Revenue stalled at $2.5 billion, off 1%, with advertising falling 6% from the year-earlier period. Operating income inched up 2% to $708 million.

In the earnings release, CEO Bob Bakish called 2018 a “pivotal year” for Viacom. “We successfully turned around our core business, with dramatic improvements across our networks, at Paramount and in distribution,” he said. “We also took important steps to evolve Viacom for the future – investing in our portfolio of advanced marketing solutions, digital and experiential offerings and global studio production business. As we head into 2019, we are excited about the companys evolution and expect to return to topline growth.”

Viacom has made fewer headlines of late while CBS–which is controlled by National Amusements, the same major shareholder that runs Viacom–has experienced a fall season of top-to-bottom executive turnover and questions about its management and plans. Bakish could face questions from analysts (most of whom still expect the companies to one day reunite) during the companys conference call later this morning to discuss the financials. If past is prologue, however, he is unlikely to offer many comments about the companys M&A future.

Original Article

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