Viacom earnings plummet; Paramount revenue down 29%

Viacom Inc.’s profit fell short of Wall Street’s expectations as the company continued to struggle with ratings declines at Nickelodeon and other cable networks while worldwide theatrical revenue took a nose dive.

For the April-June period, the New York-based media company controlled by mogul Sumner Redstone generated net income of $534 million, or $1.01 a share, compared with $574 million, or 99 cents, for the year-earlier period.

Fiscal third-quarter revenue came in at $3.24 billion, a 14% decline from $3.77 billion in the prior year period.

“Viacom is the only large-cap media company to have missed estimates this quarter, and today’s miss marks the first earnings miss by Viacom since the fourth quarter of 2008,” Bernstein & Co. analyst Todd Juenger noted Friday in a research report.

The company had tough comparisons because the comparable quarter of 2011 featured high-profile TV events and blockbuster movies. Its TV networks and Los Angeles movie studio failed to create enough sizzle this time around.

The company’s all-important media networks, a group that includes Nickelodeon, MTV, VH-1, BET, Comedy Central and TV Land, saw revenue decline 5% to $2.27 billion, primarily because of lower advertising dollars. Domestic advertising slumped 7%.

The television division mustered $934 million in operating income, a 10% decline from the $1 billion in the previous year period.

Revenue for the Paramount Pictures’ filmed entertainment unit tumbled 29% to $1.01 billion. Viacom said Friday that worldwide theatrical revenues were down 52% in the quarter to $283 million, reflecting a reduced number of releases. During the quarter, Paramount released three films, DreamWorks Animation’s “Madagascar 3: Europe’s Most Wanted,” “The Dictator” and “Titanic 3D.”

In May, Paramount abruptly bumped the release of its sole summer action movie “G.I. Joe: Retaliation” from June of this year until March 2013. In the third quarter of 2011, Paramount burped out such blockbusters as DreamWorks Animation’s “Kung Fu Panda 2” and Marvel’s “Thor.”

Worldwide home entertainment revenues fell 8% in the quarter, and worldwide television license fees decreased 24%. Meanwhile, worldwide ancillary revenues soared 44% to $104 million in the quarter, driven by higher digital revenues.

Paramount failed to deliver much to the company’s bottom line. The studio’s operating income was down 6% to $46 million.

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