Viacom shares have fallen sharply on news of a delayed payment from a Chinese partner and uncertainty about the future prospects of pay TV in the US after the media group posted Q3 results, despite it posting solid gains in revenue and profit.
Viacom’s revenues for its fiscal third quarter rose by 8% to US$3.36 billion, while adjusted operating income rose by 5% to US$805 million, and net earnings jumped by 57% to US$680 million thanks to the sale of its stake in premium cable channel Epix to MGM.
Viacom posted solid gains in both media networks and filmed entertainment revenues.
Media networks revenue grew by 2% to US$2.56 billion. While domestic revenues were flat, with ad revenue in particular suffering, international grew by 8% to US$522 million, driven in particular by the acquisition of Argentinian broadcaster Telefe. The gains were offset to some degree by currency movements, which had a five percentage point negative impact.
Filmed entertainment revenues grew by a strong 36% to US$847 million, with revenues from current quarter releases up 199% compared with the same period last year, driven in particular by the release of Transformers: The Last Night.
“Every day we are working hard to reinvent Viacom and revitalize its brands for the future, and the early, tangible results are encouraging.There remains much work to be done, but we will continue to build on this progress for our shareholders, partners and fans,” said president and CEO Bob Bakish, who has been charged with turning the company’s fortunes around.
Despite the gains, Viacom shares slid sharply in after hours trading after the company said it had yet to receive a payment from Huahua Media, a Chinese studio with which it struck a film financing deal earlier this year. Viacom CFO Wade Davis told investors that the deal remained in effect.