Viacom’s fiscal second-quarter earnings were accompanied by modest 1% growth in its media networks segments, helped along by rapid growth in the company’s international business.
Media networks revenues increased 1% to $2.43 billion as domestic revenues decreased 3% to $1.86 billion and international revenues grew 18% (or 9% after excluding favorable foreign exchange) to $566 million.
The decline in the domestic business was due to advertising revenues falling 3% to $841 million because of lower linear impressions that were somewhat offset by higher pricing and growth in Advanced Marketing Solutions revenue. Domestic affiliate revenues fell 4% to $934 million due to subscriber declines that outpaced rate increases.
International advertising revenues grew 11% (or 1% after excluding favorable foreign exchange) to $264 million. International affiliate revenues grew 23% (or 14% after excluding favorable foreign exchange) to $222 million in the quarter, thanks to increased SVOD and other OTT revenues.
The media networks also got a boost from ancillary revenues, which were up 30% to $168 million thanks to growth in consumer product, recreation and live event revenues.
Adjusted operating income for media networks fell 5% to $706 million due to higher segment expenses.
“Viacom continued to accelerate progress against its strategic priorities, delivering improvements across key metrics in the quarter. Our flagship brands increased audience share among important demos for the fourth consecutive quarter, and we saw sequential improvements in domestic advertising and affiliate revenue performance. Internationally, Viacom continued its winning streak, achieving double-digit revenue and profit gains in the quarter while expanding its global footprint through new channel launches and innovative mobile distribution deals across Europe and Asia,” Viacom CEO Bob Bakish said in a statement.
Overall, Viacom’s revenues decreased 3% to $3.15 billion during the quarter as the filmed entertainment segment lagged due to fewer theatrical releases. Operating income rose 37% to $456 million and net earnings from continuing operations attributable to Viacom grew 112% to $256 million.