Nickelodeon, Paramount drive Viacom revenue down for Q4

Michelle Clancy | 16-11-2012

Big media powerhouse Viacom has reported an increase of 12% in net income to $626 million for its fiscal fourth quarter, even as it saw a 17% revenue decline to $3.36 billion, thanks mainly to lower movie earnings at Paramount studios and continued softness in advertising revenue for the Nickelodeon cable net.

Revenues for the full year were $13.89 billion, down 7% from the previous year, reflecting higher media networks revenue. Full-year adjusted operating income grew 1% to $3.9 billion, for the same reason. But success in the networks wasn't enough to even out the underperforming film division.

Paramount's revenue fell 39% to $1.09 billion year-over-year in the quarter, largely because it only had one new release in the quarter: Katy Perry: Part of Me. In the year-ago quarter the studio had Transformers: Dark of the Moon to rely on, which grossed $1.1 billion.

Execs didn't seem fazed. "Paramount...continued to achieve solid margin growth in the fourth quarter and full year, and has an exciting pipeline in place with eight films in the first fiscal quarter, including [the Tom Cruise vehicle] Jack Reacher, DreamWorks Animation's Rise of the Guardians and the recently released Flight [starring Denzel Washington]," said Philippe Dauman, president and CEO at Viacom.

Meanwhile, its cable channels, which include Nickelodeon, MTV and Comedy Central, did see some weakness, namely domestic advertising revenue that fell by 6%. Of particular issue is Nickelodeon, which has been losing ratings the past few quarters, and attendant revenue. Viacom announced a new lineup for the channel and a fresh content lineup that includes a new version of Teenage Mutant Ninja Turtles, and overall, content investment at Nick and MTV (which loses Jersey Shore this year) made for a 3% drop in operating income for the media networks for the quarter.

Nonetheless, carriage deals have spurred revenue. "Viacom is executing on its goals of continued investment in great content, ongoing operational excellence and ever-increasing returns to shareholders," said Dauman. "Our media networks drove value in the quarter and the year through steady growth in distribution revenues, and the production of new and engaging programming that
connects with valuable audiences."

Part of that strategy is to continue to look at multiscreen, multiplatform opportunities. "Viacom continues to create many of the world's best known and most exciting media properties, and delights audiences across the globe with content for every screen imaginable," added executive chairman Sumner Redstone. "Our unparalleled creative minds and Philippe's outstanding management position Viacom perfectly for long-term growth."

Elsewhere in its earnings, Viacom said it would continue its aggressive stock repurchasing program with a plan to buy back at least $2.5 billion in shares in the current fiscal year.