Viacom's Earnings Plunge
In some ways, Viacom's fourth-quarter results, filed today (Thursday), resembled the box-office results last weekend for Hansel and Gretel: Witch Hunters, produced by the company's Paramount Studios. The movie opened in first place with nearly $20 million -- but analysts were quick to point out that the film cost $50 million to produce and that it most likely will not be profitable. Similarly, in today's SEC filing, Viacom posted net profits of $470, more than twice the $212 million that it reported for the same quarter a year earlier. But the earlier period included a write-down of $379 million paid out as part of the settlement of a dispute with its onetime videogame division, Harmonix Music Systems, producers of the popular Rock Band title. Adjusted for that payout, net earnings were actually down 22 percent. Indeed, there was little in Viacom's filing to cheer investors. Paramount took the biggest hit as revenue from theatrical and home-video releases dropped 37 percent, resulting in a loss for the quarter of $139 million. With nothing approaching the success of 2011's Mission: Impossible -- Ghost Protocol at the box office and fewer releases overall during the quarter, theatrical revenue plunged 43 percent. Likewise, ratings continued to slip at its cable networks, principally MTV and Nickelodeon, resulting in lower ad rates to advertisers. However those lower rates were partially offset by higher fees the company was able to extract from cable providers. Investors had anticipated the soft quarter and in fact the results narrowly beat analysts' forecasts. At midday trading on the NYSE, Viacom shares were virtually unchanged.