Viacom's Q4 income sinks 71% on lower affiliate fees, weak ad sales
Viacom, the diversified media company in the midst of leadership changes and early talks to merge with CBS Corp., said Wednesday fiscal fourth quarter net income sank 71% as lower fees from TV distributors and weaker advertising sales pushed its total revenue lower.
Net income for the owner of Paramount Pictures, MTV, BET, Comedy Central and Nickelodeon totaled $252 million for the three-months period, compared with $884 million a year ago.
Per-share earnings, after adjusting for some items, were 69 cents, better than the 65 cents estimated by analysts who were polled by S&P Global Market Intelligence.
Total revenue for the quarter fell 15% to $3.2 billion. Revenue for fiscal 2016 was $12.5 billion, a 6% drop.
Earlier this month, Viacom, now firmly controlled by the Redstone family, appointed Robert Bakish as acting president and CEO, replacing interim CEO Tom Dooley. Working with a new board that has been remade by former chairman Sumner Redstone and his daughter, Shari Redstone, Bakish will oversee the company while the board seeks a permanent CEO and continues to explore a possible merger with CBS.
National Amusements Inc., the Redstone family's privately held theater company, controls the voting stocks of CBS and Viacom and has called for the companies to merge to pool their resources and gain bargaining leverage against pay-TV companies as more consumers ditch cable TV.
"Viacom ended the 2016 fiscal year well into our transition, as the company’s industry-leading data program increased in size and sophistication, ratings stabilized at several of our key networks and Paramount has begun to rebuild a full, dynamic slate of films," Dooley said in a statement. "We will continue to broaden our footprint."
Revenue for the media networks unit, which operates its cable channels, fell 11% to $2.5 billion during the quarter. The decline was attributed to lower affiliate fees and sluggish advertising sales.
Domestic affiliate revenue -- paid by cable and satellite companies and video streamers -- decreased 19%. Advertising sales in the U.S. fell 8% due to lower ratings at its networks.
The filmed entertainment unit, which runs Paramount, reported a 24% revenue decline to $774 million as box office sales fell from a year ago. Philippe Dauman, who was removed earlier this year as Viacom's board chairman and CEO after a power struggle with the Redstones, tried to sell a significant stake in Paramount to foreign investors. The move was opposed by the Redstones, and the company now plans to continue to run Paramount as a wholly owned subsidiary.