Viacom reported a profit in the March quarter as revenues fell.
Struggling with lower ratings and declining advertising revenues, Viacom restructured last year in order to focus its efforts and reduce costs.
The company has been the weakest performer in the media sector and is also under scrutiny because of the declining health of controlling stockholder Sumner Redstone. Redstone is embroiled in a lawsuit that challenges his competency to make health care and financial decisions.
Viacom’s net earnings were $303 million, or 76 cents a share in the fiscal second quarter, compared to a loss of $53 million, or 13 cents a share, a year ago, when the company took $784 million in charges for restructuring and retiring programming.
Excluding the charge, Viacom’s profits would have been down from a year ago.
Revenues fell 3% to $3.001 billion.
The results exceeded Wall Street expectations.
“Nickelodeon remains the number one network for kids and many of our other networks have shown sequential improvements in ratings and consumption across platforms. The continuing strength of our brands was validated by our recent renewals with DISH and Frontier on attractive terms. In the past year, we have successfully closed long-term carriage agreements with domestic distributors representing more than 44 million subscribers,” said CEO Philippe Dauman.
"We are responding to industry consumption shifts with innovative, thoughtful, and long-term strategic solutions and are generating meaningful results in many important areas, including content creation, data-based audience measurement and distribution innovation. There is much more work to be done, but we see the path to growth ahead and are very optimistic about our future,” Dauman said.
Viacom’s media networks, including Nickelodeon, MTV and Comedy Central, posted an 11% decline in operating income.
Revenues were down 3% to $2.381 billion. Domestic ad revenues were down 5% because of lower ratings at the cable networks. Domestic affiliate revenues were down 2%. Viacom said subscribers were down modestly and that there was a rate adjustment resulting from the combination of AT&T and DirecTV.
The company said programming expenses were up as it tried to turn around the ratings at its networks.
International ad revenue was down 1%, hurt by a 7% decline in foreign exchange against the dollars. International affiliate revenue was up 4%. Absent currency impacts, international affiliate revenue would have been up 11%.