Viacom reports a strong fiscal Q4


ViacomThe media conglomerate’s fiscal Q4 increased 9% to $3.65 billion, from both the Media Networks and Filmed Entertainment segments.  Media Networks revenues grew 7% to $2.46 billion, reflecting growth in domestic ad revenues and affiliate retrains. fees.  Domestic and worldwide ad revenues each increased 10%.  Domestic and worldwide affiliate revenues each increased 6%.  Excluding the impact of digital distribution arrangements, which are affected by the timing of available programming, the domestic affiliate revenue growth rate was in the high single digits.

Viacom’s media networks include MTV, VH1, CMT, Logo, BET, CENTRIC, Nickelodeon, Nick Jr., TeenNick, Nicktoons, Nick at Nite, Comedy Central, TV Land, SPIKE, Tr3s, Paramount Channel and VIVA.

Filmed Entertainment revenues via Paramount Pictures grew 11% to $1.21 billion, due to growth in home entertainment, ancillary and theatrical revenues.  Theatrical revenues increased 31% due to stronger carryover revenues, primarily driven by the release of World War Z in the prior quarter.

Home entertainment revenues rose 24%, reflecting a strong mix of titles and one additional release in the current year quarter.  Ancillary revenues increased 54% driven by fees associated with Marvel distribution rights sales and significant growth in the proportion of digital distribution revenues for key home entertainment releases in the quarter.

Adjusted operating income rose 16% in the quarter to $1.21 billion.  Adjusted net earnings from continuing operations attributable to Viacom increased 18% to $739 million, and adjusted diluted earnings per share from continuing operations were up 28% to $1.55 per diluted share.

Revenues for the full fiscal year were $13.79 billion, down 1% from the previous year, as an increase in Media Networks ad revenues and affiliate fees was more than offset by decreased Filmed Entertainment revenues. Adjusted operating income grew 1% to $3.94 billion, reflecting an increase in Media Networks operating income and a decrease in Filmed Entertainment.  FY adjusted net earnings from continuing operations rose 2% to $2.32 billion and full-year adjusted diluted earnings per share from continuing operations increased 11% to $4.68 per diluted share.

FY, Media Networks revenues rose 5% to $9.66 billion, off of a 9% increase in affiliate fees to $4.25 billion and a 2% gain in ad revenues to $4.86 billion.  Domestic affiliate revenues increased 10% and domestic ad revenues grew 3%, as positive ratings trends and strong marketplace demand in the second half of the year drove an increase in the volume of commercial units. Filmed Entertainment revenues were down $538 million.

Said Philippe Dauman, Viacom CEO: “Viacom’s commitment to creative and operational excellence, and our continued investment in content, delivered an outstanding quarter and strong fiscal year.  Our Media Networks had strong growth in both advertising and affiliate revenues as ratings improved across our brands.  We remain at the forefront of creating new and groundbreaking experiences that seamlessly translate across multiple screens and drive deep engagement with our hit programming.  In Filmed Entertainment, the success of World War Z and strong performance of the Star Trek and GI Joe franchises in the home entertainment market drove solid returns in the quarter, and we are very optimistic about Paramount’s ambitious pipeline of branded and franchise films. Our strong cash flow and balance sheet enhance our ability to deliver significant value directly to shareholders through dividends and share repurchases.  In fiscal 2013, Viacom returned $5.4 billion to shareholders, including $2.7 billion in share repurchases in the fourth quarter.”

For the quarter, Viacom repurchased 33.7 million shares under its stock repurchase program, for an aggregate purchase price of $2.7 billion.  As of 9/30, Viacom had 449 million shares of common stock outstanding.  As 11/13, Viacom had $9.63 billion remaining in its $20 billion stock repurchase program.

Marci Ryvicker, Wells Fargo Senior Analyst said Viacom beat their estimates: “Consolidated revenue was $3.652B (+9%) vs. our $3.531B (+5%) and Consensus of $3.583B (+6.5%), with the beat in both Networks and Film. The big surprise here was the acceleration of domestic (and international) Network advertising to +10% each.

Networks revenue $2.460B (+7.4%) vs. our $2.442B (+6.7%) was driven by domestic and international advertising coming in at +10% v. our +7% and +1% estimates, respectively. Domestic affiliate fee revenue was a bit lighter at +6% v. our+7% expectation…There were two positive takeaways from today’s release – accelerated advertising and a strong buyback.”