Transformers: Age of Extinction was a huge box office winner during the quarter. Credit: Paramount Pictures.
Shares of Viacom (VIAB) stock gained 3% in morning trading Thursday after the mass media company reported better than expected fourth-quarter results. Here's a look at the final totals versus Wall Street's projections:
|
Consensus estimate |
$3,888..49 million |
6.5% |
$1.68 |
8.4% |
|
Q4 actuals |
$3,991 million |
9.3% |
$1.71 |
10.3% |
|
DIFFERENCE |
+$102.51 million |
+2.8% |
+$0.03 |
+1.9% |
Sources: S&P Capital IQ, Viacom press release.
"Viacom's affiliate distribution business remains a reliable engine for high-margin revenue expansion and provides significant opportunities to build new consumer experiences with long term distributors and emerging technology partners alike. Despite ratings challenges and uncertainty in the scatter advertising market at the close of the year,Viacom's advertising revenues grew in fiscal 2014, as our creative and marketing teams rolled out innovative new offerings," CEO Philippe Dauman said in a press release announcing the quarterly results.
What went right: Theatrical releases did well during the quarter. Transformers: Age of Extinction earned over $1.08 billion at the worldwide box office. Teenage Mutant Ninja Turtles took in over $460 million. Overall, Viacom's filmed entertainment segment enjoyed 12% revenue growth. The bad news? Divisional operating income declined by 27%. I'll provide further details on the discrepancy when I report on comments made during today's earnings conference call.
What went wrong: Ratings and the scatter market -- a spot-buying market for advertisers to purchase unsold 30-second inventory for TV shows -- didn't perform as well as Dauman had hoped. Specifically, advertising revenue declined 5% in the U.S. and 2% worldwide, thanks in part to a 33% increase in foreign ad sales. For the full year, ad revenue inched up 2%.
What's next: Viacom had not issued fiscal first-quarter guidance at the time of this writing. Analysts polled by S&P Capital IQ are calling for $3,441.34 million in revenue and $1.38 in earnings per share. If accurate, the figures would amount to 7.9% and 15% growth, respectively. For fiscal 2015, Wall Street forecasts $15,023.83 million in revenue and $6.83 in earnings per share.
