Viacom reported lower fiscal fourth-quarter profits as revenue fell and costs rose as it prepared to close its merger with CBS.
Net earnings dropped 22% to $307 million, or 76 cents a share, from $394 million, or 98 cents a year ago.
Revenue fell 1% to $3.433 billion,
Viacom’s earnings were better than Wall Street forecasts, but revenue was below expectations.
Viacom’s Media Networks unit reported a 3% decline in adjusted operating income to $597 million.
Revenue was down 2% to $2.614 billion, with affiliate revenue dropping 2% to $1.331 billion and ad revenue off 3% to $1.163 billion. Domestic affiliate revenue rose 1% to $1.004 billion and domestic ad revenue was up 6% to $946 million.
Viacom said revenue for its Advanced Marketing Solutions were up 83%, helping drive domestic advertising revenue in the quarter. For full year, AMS revenue was up 76%.
The domestic ad gain continued a turnaround at the company. Last quarter was the first time domestic ad revenue was up after 20 consecutive declines. Viacom’s head of ad sales, Sean Moran, will be leaving after the merger with CBS, with CBS’s president for ad revenue Jo Ann Ross heading up sales for the combined company.
Pluto TV increased its month active users to about 20 million, up 70% from a year ago. Pluto has launched 43 new channels, including 24 Viacom-branded channels in the quarter.
TV production expanded with 17 new domestic series order, up from six last year.
The company said it’s Paramount film studio, which had been struggling, was profitable for the year, improving its operating income by $117 million.
“Our strong performance in the fourth quarter capped off a pivotal year for Viacom and reflects the successful execution of our strategic priorities to evolve the company for the future,” said CEO Bob Bakish.
“We achieved several important milestones. First, we grew domestic ad sales for the full year, driven by the continued acceleration of Advanced Marketing Solutions. We also grew full year domestic affiliate revenue, driven by the extended reach of Viacom's distribution across more viewing platforms. And, for the first time in four years, we returned Paramount to full year profitability – a testament to the strength of our strategy and content slate,” Bakish said. “As we look to the future of a combined ViacomCBS, we’re thrilled with the momentum we have to create one of the world’s preeminent content companies.”