Was Viacom’s Fiscal Q4 A Hit Or Miss?


In comments distributed Wednesday morning as much of the world learned of Donald Trump’s election as the 45th President of the United States, interim Viacom President Tom Dooley expressed “great confidence” in his company’s “next phase, as the company explores the exciting possibilities ahead.”

Investors were energized, sending Viacom stock up 1.6%, to $42.35.

But, Viacom still has significant challenges to overcome, as the company saw its revenue fall 15% in fiscal Q4, from $3.8 billion to $3.2 billion — missing Street estimates.

Analysts were expecting $3.3 billion in revenue, according to Thomson Reuters.

That said, Viacom’s non-GAAP adjusted diluted earnings per share from continuing operations dipped 55%, from 1.54 to 69 cents. This topped Q4 profit forecasts, with the average estimate of 13 analysts surveyed by Zacks Investment Research (65 cents per share).

Investors clearly focused on this, rather than the net revenue miss.

Non-GAAP adjusted operating income slid 49% in the quarter, from $1.06 billion to $538 million.

Dooley singled out Viacom International Media Networks (VIMN) for driving much of the company’s growth; the division has seen considerable success in Latin America, and boasts a Miami-based production and management hub.

He also made the bold statement that its troubled Paramount Pictures arm “has begun to rebuild a full, dynamic slate of films.”

Any help is beneficial for Paramount. Viacom’s “Filmed Entertainment” division in fiscal Q4 saw revenue drop 24%, from $1 billion to $774 million. Tough comparables to the 2015 success of Mission: Impossible – Rogue Nation were officially cited as a reason for the dip. However, Paramount has seen considerable Box Office disappointments in recent months, including those comprising the company’s fiscal Q4.

Dooley believes the forthcoming Transformers: The Last Knight would be a summer 2017 smash hit.

What was perhaps the main culprit for the fiscal Q4 net revenue miss were revenue dips at its core cable networks.

Media Networks revenue declined 11%, from $2.79 billion to $2.48 billion, resulting from declines in affiliate and advertising revenues that were partially offset by higher ancillary revenues.

Debt remains a crushing concern for Viacom. It was down in fiscal Q4, compared to a year ago. But, the difference was negligible, falling from $12.29 billion to $11.91 billion.

In a conference call with analysts, Dooley noted that a possible reunification with CBS Corp. was ongoing, as a transition is set at the top that will see Dooley be replaced by Viacom international business head Bob Bakish as its next interim CEO.

In related news, Viacom’s networks have been dropped from Sony Corp. PlayStation Vue. Viacom was the OTT service’s first partner; PlayStation Vue debuted in March 2015.