Viacom plunges as CEO hits out at critics
Viacom Inc, the owner of MTV, Comedy Central, Nickelodeon and movie studio Paramount, reported a steeper-than-expected drop in quarterly revenue, hurt by lower advertising sales in the United States and few hit movie releases in the period, sending its shares down 11.3 percent.
Chief Executive Philippe Dauman, who replaced 92-year-old majority-owner Sumner Redstone as executive chairman last week, hit back at critics suggesting he may not be able to turn around the media company’s fortunes.
“Our outlook and the facts have been distorted and obscured by the naysayers, self-interested critics and publicity seekers,” Dauman said on a call with analysts.
He said Redstone and he were “in harmony” about the company’s strategy. Redstone, who is now chairman emeritus, was on the call, according to Viacom, but did not speak.
Redstone stepped aside as executive chairman at Viacom and his other large majority holding CBS Corp last week, amid doubts about his mental fitness. Redstone’s daughter Shari publicly opposed Dauman’s appointment to her father’s post.
Last week, Mario Gabelli, the second-largest owner of voting shares in Viacom after the Redstone family, said Dauman has six to nine months to turn the company around.
“Philippe has to deliver,” Gabelli told Reuters last week, adding that he wants to see a more aggressive digital and mobile strategy from Viacom.
In that direction, the company announced a deal with video messaging app provider Snapchat on Tuesday that gives Viacom exclusive rights to sell advertising around Snapchat’s content.
For the first quarter of its fiscal 2016, Viacom said domestic advertising revenue fell 4 percent, as price increases were more than offset by a decline in traditional ratings at some of Viacom’s networks.
Three analysts told Reuters they had forecast domestic ad revenue to fall 5 percent in the quarter, which ended Dec. 31. Still, the drop was an improvement from the September quarter’s 7-percent fall.
Viacom has struggled with lower ratings for its cable networks in recent years as younger viewers migrate to online and mobile video.
Total revenue declined 5.7 percent to $3.15 billion, below the $3.26 billion Wall Street had expected, according to Thomson Reuters I/B/E/S.
Excluding some items, Viacom earned $1.18 per share, meeting analysts’ average estimate.
Viacom’s stock is now down more than 45 percent in the past 12 months. It fell $4.67 to $37.22 in early Tuesday trading.
Revenue in Viacom’s filmed entertainment division, which includes Paramount, fell 15 percent to $612 million, hurt by fewer big film releases. The year-earlier quarter included the strong performance of “Teenage Mutant Ninja Turtles.”