Media company Viacom Inc. disappointed Wall Street with lower revenue in its fiscal first quarter, particularly at its Hollywood film studio, Paramount Pictures, which bombed at the box office.
In past quarters, Paramount could count on being propped up by the company's cash cow MTV and Nickelodeon television networks. But those networks are struggling to reverse ratings slides, exposing Paramount's thin film slate and a bare home video cupboard that contained only one release.
For the quarter ended Dec. 31, Paramount's film revenue plummeted 37% to $975 million. The Melrose Avenue film studio posted a $139-million loss compared with a $31-million loss in the year earlier period.
Tom Cruise's "Jack Reacher" and Denzel Washington's "Flight" could not conceal the mess created by the "Rise of the Guardians" flop. And "Paranormal Activity 4" couldn't scare up a big enough audience to help.
The studio also suffered by tough comparisons because it released the hit film, "Mission: Impossible -- Ghost Protocol," in the year-earlier period.
Worldwide theatrical revenue was $328 million in the latest quarter, a staggering 42% decline from $570 million a year earlier.
Home entertainment revenue tumbled 43% to $341 million as the studio offered just one new DVD title in the last three months of 2012 -- "Madagascar 3: Europe's Most Wanted," from DreamWorks Animation.
Overall, Viacom generated $3.3 billion in revenue, down 16% from a year earlier and below analysts' estimates of $3.48 billion, according to Thomson Reuters. The company posted $473 million, or 93 cents a share, in earnings from continuing operations, down from $591 million, or $1.06 a share, in the year-earlier period. Adjusted earnings came in slightly higher than analysts' had forecast.
Viacom is controlled by Los Angeles billionaire Sumner Redstone.
Bernstein & Co. media analyst Todd Juenger summed up Viacom's problems this way: "Unlike past quarters, this time Viacom was unable to find cost savings to make up the revenue shortfall."