Viacom reported a 3 percent drop in revenue for the third quarter to slightly more than $3.3 billion, while net earnings rose 15 percent to $463 million, compared to the same period in 2008.
The company attributed the revenue decline primarily to lower sales for both home entertainment and advertising. The profit bump was aided by expense reductions totaling $186 million.
Viacom CEO Philippe Dauman said the recessionary trends are "beginning to attenuate," and that the economy "is now moving in the right direction."
Still, the recovery will be "a bumpy one," and unpredictable, said Dauman. Increasingly, advertisers are embracing "just-in-time buying," and as a result visibility on the scatter market in the fourth quarter "remains limited." He did note that Q4 scatter seems healthy so far, with pricing up double digits vs. the upfront.
Dauman made a point of noting that Comcast intends to raise affiliate fees, contending that the company's networks are "undervalued" because they deliver 20 percent of industry audiences but only receive 8 percent of its license fees. "We are very focused on closing this gap," he said.
The company reported that affiliate fees rose 10 percent in the quarter, while domestic ad revenue dropped 4 percent, which Dauman noted was an improvement over the 6 percent drop in ads during the prior quarter. Worldwide ad revenue declined 5 percent, he said.
For the first nine months of the year, revenues fell 8 percent to $9.5 billion and profits fell 15 percent to $917 million.
For Q3, the company's media networks division posted flat revenue at $2.1 billion, while revenue at the filmed entertainment division fell 6 percent to $1.2 billion. For the first nine months, media networks revenue dipped 5 percent to just under $6 billion, while film revenue declined 13 percent to $3.7 billion.
Strong sales of the videogame The Beatles: Rock Band were offset by lower overall home entertainment and consumer products revenue.
While lower home entertainment sales—off 21 percent in the quarter—dragged down results, two films, Transformers: Revenge of the Fallen and G.I. Joe: The Rise of Cobra, fueled a 16 percent increase in worldwide theatrical revenue, the company said.
Television license fees were down 8 percent in the quarter.
Summing up, Dauman said Viacom is emerging from the recession "a stronger company, more efficient and streamlined."
Nielsen Business Media