Entertainment content company Viacom Inc. (VIAB: Quote,VIA: Quote) on Friday reported a 7 percent decline in profit for the third quarter, reflecting lower advertising revenue and a decline in filmed entertainment titles. Both adjusted earnings and revenue for the quarter missed analysts' estimates.
Viacom, the owner of Paramount Pictures movie studio and cable networks like MTV and Nickelodeon, noted that the prior-year quarter's results include substantial timing benefits from major films and television event programming, as well as digital distribution agreements.
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."
Dauman added, "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."
Viacom's Media Networks segment, which runs cable networks such as MTV and Nickelodeon, reported a 5 percent decline in third-quarter revenues to $2.27 billion, on lower advertising and ancillary revenues.
Domestic advertising revenues decreased 7 percent from last year, impacted by the timing of event-driven programming compared with the prior year's quarter. Worldwide advertising revenues decreased 9 percent in the quarter.
Filmed Entertainment division, which comprises the Paramount Pictures movie studio, saw revenue drop of 29 percent to $1.01 billion due to lower worldwide theatrical revenues, home entertainment revenues and television license fee revenues.
Worldwide theatrical revenues decreased 52 percent in the quarter to $283 million. Paramount released three films during the quarter, compared to four films in the prior-year period.
Viacom's third-quarter net earnings were $534 million, down from $574 million or $0.97 per share in the prior-year quarter. However, earnings per share rose to $1.01 from $0.97 last year on lower share count.
Adjusted net earnings from continuing operations declined to $512 million or $0.97 per share from $583 million or $0.99 per share in the year-ago period.
On average, 29 analysts polled by Thomson Reuters expected the company to report earnings of $1.00 per share. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 14 percent to $3.24 billion from $3.77 billion in the same period last year. Analysts had a consensus revenue estimate of $3.49 billion.
For the third quarter, Viacom repurchased 14.8 million shares under its stock repurchase program, for an aggregate purchase price of $700 million. As of August 2, 2012, the company had $5.18 billion remaining in its $10 billion stock repurchase program.
VIAB closed Thursday's trading at $45.83, down $0.40 or 0.87 percent on a volume of 5.26 million shares. In Friday's pre-market, the stock is down $4.00 or 8.73 percent to $41.83.
VIA closed Thursday's trading at $47.77, down $0.33 or 0.69 percent on a volume of 49,900 shares.
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by RTT Staff Writer
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