Viacom's profit plunges 60 percent

Candice Alexander
May 5, 2017

Viacom has said it will focus more resources on its six "flagship" brands: Nickelodeon, Nick Jr., MTV, Comedy Central, BET and Paramount. "We have a very strong point of view in our conversations about it", Bakish said on the company's earnings call.

"There is a lot of work still to do, but we are making important changes at Viacom, taking substantial strides towards revitalizing our portfolio of brands and returning the company to consistent top-line growth", Bakish said.

Net profit attributable to Viacom plunged 60 percent to $121 million, or 30 cents per share in the second quarter, partly reflecting a $174 million charge related to restructuring. The company's earnings (on an adjusted basis) of 79 cents per share comfortably beat the Zacks Consensus Estimate of 59 cents.

Bakish became chief executive in December after almost a year of management turmoil at that included boardroom battles and the ouster of former Chief Executive Philippe Dauman.

Paramount continued to suffer from an anemic film slate.

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Viacom' s filmed-entertainment segment, which includes Paramount Pictures, drew in $895 million, above estimates, as "xXx: Return of Xander Cage" helped the studio almost double its theatrical revenue overseas. The quarter also included the release of Monster Trucks, for which Viacom previously took a $115 million write-down.

In March, the company hired movie industry veteran Jim Gianopulos, the former head of Twenty-First Century Fox's film studio, as Paramount's new chief. "In our opinion, Viacom ultimately needs to convince investors that the terminal value of its media business can be higher despite a focus on a smaller base of assets".

In January, Paramount announced a deal with two Chinese film companies, Shanghai Film Group and Huahua Media, to invest US$1 billion in Paramount, giving the studio much-needed cash and support as it attempts to grow. "VH1 continues its resurgence with a seventh consecutive quarter of year-over-year ratings growth, while TV Land and CMT achieved their best quarterly ratings in three years", the company added.

"We've never really had concerns about payment", Davis said. Revenue at the company's Paramount Pictures film division, which brought in former 20th Century Fox executive Jim Gianopulos to head the studio, rose 10% in the quarter thanks to strong worldwide performance from "XXX: Return of Xander Cage".

Film revenue rose 37 percent to $895 million. Overall, theatrical revenue rose 10 percent driven by a 98 percent global gain, led by xXx, that more than offset a 45 percent domestic drop. Operating income decreased 43 percent to $332 million, and adjusted operating income increased 4 percent to $612 million.

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