Viacom’s earnings rise despite flat advertising and declining affiliate revenues

Viacom’s media networks revenues rose 3% to $2.55 billion. (Image: Ben Munson)

Viacom’s fiscal fourth quarter earnings witnesses a rise in overall revenues and net earnings despite flat domestic advertising revenues and down affiliate revenues.

The company’s overall revenues rose 3% to $3.32 billion and operating income grew 112% to $705 million, helped along by strong international growth. Adjusted operating income rose 7% to $578 million, net earnings from continuing operations attributable to Viacom grew 167% to $674 million, and adjusted net earnings from continuing operations attributable to Viacom grew 14% to $310 million.

“In the fourth quarter and full year, we made strong progress against our plan to fundamentally stabilize and revitalize Viacom, with top line gains in both Media Networks and Filmed Entertainment segments driven by continued execution on our strategic priorities,” said Viacom CEO Bob Bakish in a statement.

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Viacom’s media networks revenues rose 3% to $2.55 billion, as international revenues grew 24% to $593 million and domestic revenues decreased 2% to $1.96 billion. Overall ad revenues for the segment rose 6% to $1.22 billion but domestic ad revenues stayed flat at $936 million, which Viacom attributed to a mix of ratings growth offset by declining subscribers and reduced ad loads. Meanwhile international ad revenues increased 36% to $288 million, thanks to the Telefe deal and increases in Europe.

Viacom’s media networks affiliate revenues mostly held steady, down 1% to $1.15 billion, as domestic affiliate revenues declined 3% to $948 million due to fewer subscribers and lower revenue from SVOD.

Adjusted operating income for media networks declined 8% to $693 million, primarily reflecting increases in programming expenses.

“Viacom is stronger and our momentum continues to build. To accelerate our transition to long-term, sustainable growth, we are ramping up the evolution of Viacom's media business to better serve next generation platforms and solutions while continuing to diversify our business and strengthen our global portfolio of flagship brands. In the coming year, we will continue to focus on unleashing the full creativity and energy of Viacom to create greater value for our shareholders and audiences,” Bakish said.