Viacom Revenue Down, Earnings Up, Investors Concerned

Analyst: 'Is MTV broken?'

Analysts have changed tone about Viacom, the owner of MTV, Nickeolodeon, Comedy Central, VH1 and BET. Barclay's media guru Anthony DiClemente was the most poilite of the bunch, congratulating Viacom execs on the lack of correspondance between plummeting ratings and more modestly diminished ad prices. "Investors are pleasantly surprised by the lack of correlation between ratings declines and advertising trends," DiClemente told Philippe Dauman, Viacom's president and CEO.

Marci Ryvicker of Wells Fargo was less upbeat. "Is MTV broken?" she asked.

"It is not broken. It is highly successful," Dauman replied. He went on to tout Catfish as "the highest-rated launch in MTV history," a statement that is tough to parse, given other highly successful shows far in the network's past (Catfish logged some 2.7 million viewers, which is as good as anything the network has put out since Ridiculousness last year). The numbers are nowhere near figures for most episodes of the now-canceled Jersey Shore, however. 

In fact, analysts are starting to question Viacom's prospects for next year. Ryvicker said that investors were concerned that the network might not be able to carry its long-running stock buyback program to its $2.5 billion projected spend (the program is one of the reasons earnings keep going up despite tough year-over-year comparisons), and Todd Juenger, a senior analyst plainly questioned the network's projections for its own growth.

“The swing factor is advertising," Juenger said. "As we understand FY 13 consensus expectations, they include positive advertising revenue growth (+1 percent). That does not seem like a realistic base case to us."

Viacom's earnings were up in Q4 despite serious drops in revenue, largely due to decreased ad sales. Sales figures were down from $1.25 billion for the same quarter last year to $1.16 billion. Dauman offered the same reasons he'd given for the year-over-year declines in previous quarters: an increase in time-shifted viewing and lack of competent measurement from industry leaser Nielsen (Nielsen strongly denies these claims and has said that it is making its measurements more accurate, not less).

Dauman was upbeat about Nickelodeon in particular. "That period of weakness is starting to lift," he said.

Dauman also praised the kids' network's newest hope, a new Ninja Turtles cartoon, which has performed well among kids 2-11 on Saturday mornings.

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