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Viacom (VIAB) Q4 Earnings Top Estimates, Revenues Flat Y/Y

Zacks Equity Research

Viacom VIAB reported fourth-quarter fiscal 2019 adjusted earnings of 79 cents per share that beat the Zacks Consensus Estimate by 3.9%. The figure declined 14% year over year on a constant-currency (cc) basis.

Revenues of $3.43 billion surpassed the Zacks Consensus Estimate by 0.4%. The figure was unchanged year over year at cc.

Selling, general and administrative (SG&A) expenses increased 10.5% year over year to $891 million.

Adjusted operating income decreased 12% at cc from the year-ago quarter to $572 million.

Following the fourth-quarter earnings announcement, Viacom’s shares were up 2.3% in pre-market trading.

Viacom Inc. Price, Consensus and EPS Surprise

Viacom Inc. Price, Consensus and EPS Surprise
Viacom Inc. Price, Consensus and EPS Surprise

Viacom Inc. price-consensus-eps-surprise-chart | Viacom Inc. Quote

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Media Networks Details

Media Networks revenues were $2.61 billion, up 6% year over year at cc. Affiliate revenues rose 8% year over year. Advertising revenues increased 4%. Consumer Products, Recreation and Live Events (previously the Ancillary segment) revenues climbed 1% at cc.

Domestic revenues grew 3% on a year-over-year basis to $2.03 billion. International revenues increased 15% at cc to $586 million.

Domestic advertising revenues grew 6%, driven by 83% year-over-year jump in Advanced Marketing Solutions (AMS) revenues. Domestic affiliate revenues inched up 1%.

Telefe maintained the #1 position in ratings. Channel 5, MTV and Paramount Network International also recorded share growth on a year-over-year basis in the reported quarter.

Viacom International Media Networks delivered strong growth at cc. Affiliate revenues increased 34%, while International advertising revenues decreased 2%.

Moreover, Viacom expanded its suite of streaming products with the launch of BET+ in the reported quarter.

During the quarter, Nickelodeon Studios announced a new multi-year output deal to produce original animated films and series for Netflix.

Filmed Entertainment Details

Filmed Entertainment revenues decreased 14% year over year to $851 million.

Theatrical revenues of $94 million plunged 72%. While Crawl generated more than $90 million, revenues from Dora and the Lost City of Gold were more than $116 million at the global box office.

For fiscal 2020, Paramount’s film slate now has 17 films, including A Quiet Place Part II, The Spongebob Movie: Sponge on the Run and Top Gun: Maverick, among others.

Paramount Television has 26 shows ordered or in production.

Home entertainment revenues declined 3% year over year to $153 million. Ancillary revenues fell 2% to $54 million. However, licensing revenues rose 26% year over year to $550 million.
 
Pluto TV Details

Pluto TV’s monthly active users (MAUs) increased 70% to-date this calendar year.

During the quarter, Pluto TV launched 43 channels and continued to expand its international presence. Pluto TV Latino now has a suite of 22 channels, with more than 4,000 hours of programming in Spanish and Portuguese.

Zacks Rank & Stocks to Consider

Viacom currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader consumer discretionary sector are BrightView BV, Charter Communications CHTR and Zynga ZNGA, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for BrightView, Charter Communications and Zynga is pegged at 19%, 38% and 13.9%, respectively.

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