Viacom’s fiscal first-quarter earnings were marked by its media networks segment mostly holding its ground.
The segment’s revenue totaled $2.56 billion during the quarter as ad revenue rose 1% to $1.31 billion. But the ad growth was offset by a 4% decrease in affiliate revenues.
The ad growth largely originated overseas for Viacom. Domestic advertising revenues fell 5% to $937 million due to lower linear impressions. International advertising revenues increased 22% to $371 million. Domestic affiliate revenues decreased 8% to $907 million, primarily due to subscriber declines and lower SVOD revenues, partially offset by rate increases. International affiliate revenues grew 18% to $187 million in the quarter.
The segment’s domestic revenues fell 6% to $1.93 billion while international revenues grew 18% to $631 million. The overall decrease in revenues, along with higher expenses, lead to adjusted operating income for media networks falling 7% to $913 million.
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“Viacom has also made considerable progress in its push to accelerate consumption and monetization on next-generation platforms, achieving substantial growth in worldwide digital advertising revenues, expanding distribution on fast-growing virtual MVPD and mobile services, and ramping up resources and talent at Viacom Digital Studios. Additionally, since the end of the quarter, we continued to expand our digital capabilities with the acquisition of influence marketer WHOSAY and the world's premier online video event, VidCon,” said Viacom CEO Bob Bakish in a statement.
“We remain deeply committed to maintaining strong financial discipline and delivering returns for our shareholders. In the quarter, Viacom continued to improve its leverage profile and we are on track to achieve $100 million in new cost savings in the current fiscal year, and hundreds of millions more in 2019," Bakish added.
Overall, Viacom’s revenues decreased 8% to $3.07 billion and operating income increased 2% to $717 million. Adjusted operating income decreased 4% to $717 million in the quarter.