The non-broadcast side of the Sumner Redstone media empire suffered from box office and advertising woes, leading to a 14% loss in the revenue department to $3.24B. Filmed entertainment was one of the leakiest segments of the business.
Expenses were down, holding the loss in operating income to 9% on a $903M result. Adjusted net earnings from continuing operations came in at $512M, a loss of 12%.
Sumner M. Redstone, Executive Chairman of Viacom, said, “We continue to develop outstanding creative content on every platform while efficiently executing Viacom’s strategy. We are confident that Viacom’s unrivaled portfolio of powerful brands will continue to grow and evolve over the long term as we entertain and inspire new audiences around the world every day.”
Philippe Dauman, President and Chief Executive Officer of Viacom, said, “Despite challenging year-on-year comparisons with last year’s strong third quarter, Viacom remains committed to pursuing its long-term strategy of international expansion, continued programming investment and ongoing focus on operational discipline. Viacom continues to bring cultural powerhouses to fans around the world, and we are aggressively investing in our brands to create new hits, like Workaholics and Legend of Korra, now the most watched kid’s program on cable in the quarter. Paramount also continued to strengthen its platform by aligning its slate to provide upcoming releases with the best possible opportunity to succeed in the global marketplace.
Viacom noted the following key stats:
* Media Networks revenue declined 5% to $2.27 billion, driven by lower advertising and ancillary revenues.
* Domestic advertising revenues decreased 7%, impacted by the timing of event-driven programming compared with the prior year’s quarter.
* Worldwide advertising revenues decreased 9% in the quarter.
* Domestic affiliate revenues decreased 1%, reflecting the significance of digital affiliate revenues in the same quarter last year. Excluding the impact of digital distribution arrangements, our domestic affiliate revenue growth rate was in the high-single digits. Worldwide affiliate fees increased 1%.
* Filmed Entertainment revenues were down 29% to $1.01 billion. Worldwide theatrical revenues decreased 52% in the quarter to $283 million, reflecting the number and mix of our current quarter releases. During the quarter, Paramount released three films, DreamWorks Animation’s Madagascar 3: Europe’s Most Wanted, The Dictator and Titanic 3D. In the comparable period of 2011, Paramount released four films: DreamWorks Animation’s Kung Fu Panda 2, Marvel’s Thor, Super 8 and Transformers: Dark of the Moon.
* Worldwide home entertainment revenues declined 8% in the quarter, driven by the mix of available titles, and worldwide television license fees decreased 24% reflecting both the number and mix of titles.
* Worldwide ancillary revenues increased 44% to $104 million in the quarter, driven by higher digital revenues.