Viacom revenue falls short on weak DVD sales
Viacom's quarterly revenue dropped a greater-than-expected 5% drop on a decline of DVD sales at Paramount Pictures, and its shares whipsawed throughout the trading day.
February 04, 2011 / 08:24 IST
Viacom's quarterly revenue dropped a greater-than-expected 5% drop on a decline of DVD sales at Paramount Pictures, and its shares whipsawed throughout the trading day.
Its shares fell as much as 3% before setting a new three-year high after Viacom Chief Executive Philippe Dauman struck a confident tone on the company's global and US advertising growth outlook. The shares later lost ground and were down 1.5% in afternoon trading.Dauman expects a "particularly robust upfront this spring," when television programmers sell advertising ahead of the coming season, and he expects global and domestic ad revenue to rise by double-digit percentages in the March quarter.Viacom's drop in revenue came as rivals Time Warner Inc and News Corp impressed Wall Street on Wednesday with strong advertising and overall revenue improvements. "Viacom's domestic advertising growth is very impressive," said RBC Capital Markets analyst David Bank. "It just looks slightly less impressive coming after Time Warner and News Corp results."Late Wednesday, the company said it would allow programs such as "The Daily Show with Jon Stewart" to be shown on Hulu, the online video joint venture of US TV broadcasters. Viacom has sought to generate additional fees for its programs as consumers lose interest in purchasing DVDs. Viacom's revenue for its fiscal first quarter, ended December 31, fell to USD 3.83 billion from USD 4.02 billion a year earlier, missing analysts' average forecast of USD 4.07 billion, according to Thomson Reuters I/B/E/S.At the company's media networks division, which includes cable networks MTV, Comedy Central and Nickelodeon, first-quarter revenue rose 6% to USD 2.38 billion due mainly to stronger advertising sales, up 10% in the United States.Revenue at Viacom's filmed entertainment group, which includes Paramount Pictures, fell 16% to USD 1.5 billion on a 44% slump in home entertainment revenue. Adjusted earnings per share of USD 1.02 narrowly beat analysts' average forecast of USD 1.00.During the first quarter, net income from continuing operations was USD 629 million, or USD 1.02 per share, compared with USD 691 million, or USD 1.19 cents per share, a year earlier.Shares were down 67 cents at USD 43.30 on the New York Stock Exchange. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
