On Thursday, Viacom Inc. (Paramount movie studio’s owner, which also owns many other cable channels) revealed that its net income had increased by 13% in the last quarter as revenue dropped higher than the expectations of Wall Street due to the drop in TV commercial revenue and lack of a powerful theatrical release.
For the July-September quarter, the net income was $650 million ($1.26 per share) as against $576 million ($1 per share), a year before. After setting off one-time adjustments, earnings stood at $1.21 a share.
The analysts were anticipating altered earnings of $1.17 a share, and it was a pleasant 13% boost. Revenue in the financial 4th quarter dropped by 17% from $4.05 billion to $3.36 billion, less than what analysts had expected ($3.41 billion). Viacom decreased the expenditures by 26% from $3.12 billion to $2.31 billion.
The revenues at the cable television network business Viacom, which includes Nickelodeon, Comedy Central, BET, and MTV, were majorly unaltered at $2.29 billion, while the operating profit dropped by 3% to $933 million.
The environment for advertising has slowed down for many of the key media companies, composited in the quarter by London Olympics, which visualized audiences and advertising move to NBC and its sibling cable networks. Viacom experiences extra challenges of the current audience weakness as its key television networks.
The media company told that the hikes in the fees by the satellite and cable companies to take its channels were counteracted by advertising revenue declines. Advertisement revenues dropped 6% in the United States and 7% globally. Viacom told that a ten-day shutdown of its channels on DirecTV due to a fee disagreement cancelled the advantages of the BET Awards approaching the July-September quarter. It dropped in the last quarter of 2011.
During the analysts’ conference, Philippe Dauman (CEO) told that the Nickelodeon ratings were becoming stable as the kids’ network aired fresh episodes of ‘SpongeBob SquarePants’ and a ‘Teenage Mutant Ninja Turtles’ revamp. He stated that the new episodes of the original programs were assisting other networks also.
Dauman restated complaints that the present measurement methods do not completely capture the audiences of Viacom, especially online, but told the company won’t take programming decisions depending on old-fashioned measures.
Viacom stated that the advertisement revenues were exhibiting indications of improvement in the present quarter, though it probably won’t be sufficient to show advancements compared to previous year.