Struggling Viacom’s earnings continued to drop as ad revenue and streaming revenue declined.
The company has been one of the worst performers in the media sector and has been additionally burdened with management turmoil. Its long-time CEO Philippe Dauman was ousted by the family of Sumner Redstone, which controls the company's voting stock.
The Redstones have asked Viacom’s board to consider combining the company with CBS, which is also controlled by the Redstones. Both CBS and Viacom have hired advisors to study possible combinations.
Net earnings for Viacom's fiscal fourth quarter were $263 million, or 64 cents a share, compared to $892 million, or $2.21 a share a year ago.
Revenues fell 15% to $3.2 billion.
The earnings met Wall Street expectations on earnings per share, but revenue was below forecasts.
"If Viacom purposely scheduled their EPS report the morning after the election, hoping their financial results would get lost in other news, they got their wish," noted Todd Juenger, analyst at Sanford C. Bernstein, in a report that was simply headlined "Sad". "Given the dislocations across the markets that will begin today and last into the future, we doubt many of you are in the mood to read about Viacom results, any more than we are in a mood to write about them. But we publish this short report today so we have a record of what happened," Juenger wrote.
"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. In addition, our international media networks business is stronger than ever, and we will continue to broaden our footprint and apply our successful strategies to additional territories in attractive markets,” said Tom Dooley, interim president and CEO. “With new leadership across the company, continued investments in new content, technologies and targeted acquisitions, and an expanded Board of Directors, I have great confidence in Viacom’s next phase, as the company explores the exciting possibilities ahead."
Dooley is leaving the company and is being replaced as interim CEO with Bob Bakish, who runs Viacom’s international business and has also been put in charge of the company’s music and entertainment channels in the U.S.
Operating income for Viacom’s media networks, including MTV, Nickelodeon and Comedy Central, dropped 27% to $750 million. Revenue for the media networks group was down 11%. Domestic affiliate revenues decreased 19% as streaming video revenues declined.
Domestic advertising revenues were down 8%, reflecting a drop in TV ratings at some of the company’s networks.
Paramount Pictures lost $137 million in the quarter, compared to a $122 million profit a year ago. Revenue fell 24% to $774 million.