Viacom (VIAB) Beats Earnings and Revenue Estimates in Q3

Viacom Inc. VIAB announced third-quarter fiscal 2016 (ending Sep 30) results wherein the bottom line and the top line beat the Zacks Consensus Estimate.

Adjusted net income from continuing operations in the reported quarter was $419 million, down 29% from $591 million recorded in the prior-year quarter. Adjusted earnings per share were $1.05, beating the Zacks Consensus Estimate of $1.02 but declining 29% year over year.

Meanwhile, total revenue in the quarter came in at $3,107 million, up 1.6% year over year and above the Zacks Consensus Estimate of $2,997 million. A strong U.S. dollar hurt the top line performance to a considerable extent. Meanwhile, quarterly adjusted operating income came in at $769 million, down 29% year over year.

At the end of the third quarter, Viacom had $192 million of cash & cash equivalents and $10,996 million of outstanding debt on its balance sheet compared with $506 million and $12,267 million, respectively, at the end of fiscal 2015.
 

Segmental Performance

Media Networks

Quarterly revenues totaled $2,513 million, down of 3% year over year. Quarterly operating profits came in at $872 million, down 22% year over year. Both Affiliated fee and ancillary revenues fell 7.7% and 8.5%, respectively, on an annualized basis. Also, on an annualized basis, worldwide affiliate revenues improved 9% while domestic affiliate revenues dropped 10% year over year. On the other hand, on a year-over-year basis, domestic advertising revenues decreased 4% while worldwide advertising revenues improved 13%.

Filmed Entertainment

At this segment, quarterly revenues improved 30% year over year to $621 million. Global Theatrical revenues increased over 100% year over year to $91 million post the June release of Teenage Mutant Ninja Turtles: Out of the Shadows while home entertainment business revenues fell 3.5% on an annualized basis. However, TV license fees improved 39% year over year. Quarterly operating loss stood at $26 million, against an operating profit of $48 million recorded in the third quarter of 2015. Also, ancillary revenues declined 10.9% year over year.

Zacks Rank & Stocks to Consider

Currently, Viacom carries a Zacks Rank #5 (Strong Sell). Better-ranked companies in the broader entertainment and media sector include The EW Scripps Co. SSP with a Zacks Rank #1 (Strong Buy) along with CBS Corp. CBS and MSG Networks Inc. MSGN with a Zacks Rank #2 (Buy).

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