Thin Paramount movie slate contributes to Viacom revenue slide

Tom Cruise didn’t arrive soon enough to save media company Viacom from some precarious third-quarter financial results.

Cruise has long been one of the brightest stars and biggest money-makers for Viacom’s movie studio Paramount Pictures. Over the weekend, crowds flocked to to see Cruise reprise his role as agent Ethan Hunt in “Mission Impossible: Rogue Nation,” which generated more than $120 million in worldwide box office receipts.

Now, Wall Street is watching to see whether Viacom executives can channel their inner Ethan Hunt as they navigate a fast-changing media landscape. Viacom hopes to rebuild after a brutal year that has seen its stock price plunge more than 45%.

Investors have become increasingly concerned about Paramount’s meager film slate that has led to steep declines in theatrical revenue. The company also is grappling with troubling ratings declines at its premiere television networks: Nickelodeon, MTV and Comedy Central.

For the April-June quarter, Viacom saw its revenue slide 11% compared to the year-earlier period. Viacom generated $3 billion in revenue in the quarter, missing analysts’ estimates of $3.2 billion.

Paramount’s lack of big films for the April-June quarter became a significant drag on the media company’s revenue picture. “Mission Impossible” with Cruise was released during the current quarter, so that movie wasn’t in a position to help.

The Paramount film and TV business generated $479 million in revenue in the fiscal third quarter, a decline of 44% compared to the year-earlier period. Theatrical revenue was down a whopping 92%.

Viacom’s television networks hit a rough patch, too. Ratings collapses at several networks has meant that Viacom had less commercial inventory to sell.

“Domestic advertising revenue -9%; nothing else you need to know,” Bernstein Research media analyst Todd Juenger wrote in a Thursday morning report for investors after Viacom released its fiscal third-quarter earnings.

For the quarter, Viacom’s cable channels generated $2.6 billion in revenue, the same amount as the year-earlier period.

Overall, Viacom produced net earnings of $591 million, or $1.47 a share, compared to $610 million, or a $1.40 a share, in the year-earlier period.

Until just a few months ago, Viacom was buying back shares, helping to boost its earnings per share. The company said it would resume the buybacks this fall.

Viacom had the misfortune of releasing its financial results in the middle of a bruising week in which Wall Street has pummeled media stocks.

Investors got spooked after Walt Disney Co. executives warned late Tuesday of lower profits at ESPN and other cable channels because of an acceleration in cable cord-cutting by consumers. That sparked the media stock sell-off, and Viacom has been particularly hard-hit.

“There is no question that our industry is in the midst of significant change,” Viacom Chief Executive Philippe Dauman told analysts. “Change can create uncertainty and concern, but with change also comes opportunity.”

Investors grabbed the opportunity to sell their shares. In Thursday morning trading, Viacom’s stock tumbled another 15% to about $42 a share. A year ago, Viacom’s stock price was hovering around $80 a share.

Dauman also sought to reassure investors that Paramount was poised for a comeback. Next year, its pipeline will return to more normal levels with 15 films scheduled for release.

“After a tough year, we believe Paramount is positioned to grow strongly next year and in the years to come, fueled both by a reinvigorated film business and our new high-growth TV production business,” Dauman said.

Twitter: @MegJamesLAT