VIAB Viacom Inc

By Kimberly Chin 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 11, 2019).

Revenue at Viacom Inc. dropped in its latest quarter, as the media giant grapples with shrinking distribution fees and moving its content and advertising beyond traditional television platforms.

Viacom, the parent of Comedy Central and Nickelodeon, said revenue for the second quarter ended March 31 fell 6% to $2.96 billion. Excluding the impact of foreign exchange, revenue fell 4%. Analysts polled by Refinitiv were expecting $3.06 billion in revenue.

Viacom's U.S. "affiliate revenue," as carriage fees and other distribution deals are called in financial reports, was $936 million, down 2% from a year earlier. Viacom said in March it expects U.S. affiliate revenue to return to full-year growth after years of stagnation.

Viacom agreed to a deal with DirecTV owner AT&T Inc. to allow the company to provide its channels but for a substantial decrease in carriage payments.

The deal comes at a time when some big media companies are struggling to sell their networks to distributors at higher prices when fewer people are subscribing to cable and satellite TV, and ratings continue to fall across the industry.

However, Viacom is working to generate revenue from production deals with nontraditional video buyers, including Facebook Watch, the social network's video-on-demand service for which Viacom is rebooting "The Real World" franchise.

"As the media landscape continues to segment across price points, we're confident in our strategy, strong results and the opportunities ahead as we continue to position Viacom for the future," Chief Executive Bob Bakish said in prepared remarks.

Overall media networks division revenue declined 6.6% to $2.27 billion. The company said domestic revenue was affected by licensing and subscriber erosion though it was partially offset by growth in its marketing solutions segment.

Viacom's Paramount Pictures has been seen as a bright spot for growth, and revenue from box-office releases more than tripled in the latest quarter. However, a decline in licensing drove overall revenue from the filmed entertainment segment, which includes Paramount, down 1.5%.

Lower operating expenses helped lift the company's profit 41% from a year earlier to $376 million, or 93 cents a share.

Earnings from continuing operations were 95 cents a share, up from 92 cents a share. Analysts were expecting adjusted earnings of 80 cents a share.

The company's Class B shares fell 1.7% in premarket trading.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

May 11, 2019 02:47 ET (06:47 GMT)

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