Weak Paramount slate contributes to Viacom’s 18% drop in profit
Paramount Pictures turned in another disappointing performance, contributing to an 18% drop in quarterly earnings for parent company Viacom Inc., the media conglomerate reported Wednesday.
The Melrose Avenue movie studio suffered from the DVD blues and tough comparisons. Due in part to Paramount’s thin film slate, Viacom’s revenue declined 6% to $3.14 billion for the 2013 fiscal second quarter, ended March 31.
For the quarter, Viacom’s earnings fell 18% to $478 million, or 96 cents a share, compared to $1.07 a share, in the year-earlier period.
Wall Street analysts, however, were encouraged by increases in advertising revenue at Viacom’s signature television networks, primarily Nickelodeon, which has seen ratings improve in recent weeks after a yearlong slump.
Paramount’s filmed entertainment revenue dropped 20% to $941 million compared with $1.17 billion in the year-earlier period. Paramount produced $65 million in operating income for the quarter, which represented a dramatic 43% decline.
The problem appeared to be that Paramount was unable to squeeze as much money from its home entertainment unit. Revenue in that division tumbled 38% due to fewer releases and less spectacular titles.
Worldwide theatrical revenue was down 15% compared with the fiscal second quarter of 2012, when Paramount was still collecting receipts for its hit film “Mission: Impossible -- Ghost Protocol,” released in the previous quarter. This year’s fiscal second quarter offered “Hansel & Gretel: Witch Hunters” and “G.I. Joe: Retaliation,” which performed better than the films released during the year-earlier period.
Much is riding on Paramount’s upcoming film releases, “Star Trek Into Darkness” and “World War Z.”
“The year ahead remains strong,” Viacom Chief Executive Philippe Dauman said in a statement.
Wall Street analysts were not expecting much from Paramount, but they were pleased that the picture at the company’s television networks -- Nickelodeon, MTV, VH1, Comedy Central and BET -- was better than expected. Several of Viacom’s TV networks have been dealing with lower ratings.
For the television networks division, revenue was up 2% to $2.2 billion due to increases in advertising revenue and subscriber fees. Operating income was down 2% to $873 million.
Viacom is controlled by Los Angeles-based billionaire Sumner Redstone.
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