Viacom Inc. (VIAB,VIA) on Tuesday reported a 40 percent decline in profit for the first quarter from last year as a slight increase in revenues was more than offset by higher expenses.
However, adjusted earnings per share topped analysts’ expectations, while quarterly revenues missed their estimates. Looking ahead, Viacom said it is progressing toward a return to topline growth in 2019. The company’s shares are declining more than 1 percent in pre-market activity.
Net earnings attributable to Viacom for the first quarter decreased to $321 million or $0.80 per share from $537 million or $1.33 per share in the year-ago period.
Adjusted earnings from continuing operations were $1.12 per share, compared to $1.03 per share in the same period last year. On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.03 per share. Analysts’ estimates typically exclude special items.
Revenues for the quarter grew 1 percent to $3.09 billion from $3.07 billion last year. Wall Street analysts had a consensus revenue estimate of $3.12 billion for the quarter.
Media Networks revenues decreased 2 percent to $2.50 billion in the quarter, as a 3 percent increase in affiliate revenues was offset by a 6 percent decline in advertising revenues. The division’s performance largely reflected the unfavorable impact of foreign exchange on international revenues.
Meanwhile, Filmed Entertainment revenues rose 14 percent from last year to $621 million in the quarter, reflecting a 49 percent surge in Theatrical revenues and a 3 percent increase in licensing revenues. This was partly offset by a 3 percent decrease in Home Entertainment revenues.
Theatrical revenue gains were largely due to the performances of “Bumblebee” and “Instant Family” compared to releases in the prior-year quarter. Paramount Pictures delivered double-digit topline growth.
“Beyond the growth at our flagship networks and the resurgence of Paramount Pictures, we took a major step forward in our evolution with an agreement to acquire Pluto TV. This service will create a scaled direct-to-consumer offering for Viacom, and expand our opportunities in next-generation distribution and advanced advertising,” Bob Bakish, President and CEO of Viacom said.
In January 2019, Viacom announced an agreement to acquire U.S. free streaming television platform Pluto TV for $340 million. The transaction is expected to close in the second quarter of fiscal 2019.