Shares of Viacom (NASDAQ:VIAB) stock were up slightly by early Thursday afternoon after the media giant reported quarterly results that were steady, if not spectacular. While Viacom did not top all analyst expectations, it did report a terrific profit and grew revenue. Here's a look at Viacom's first quarter.
Viacom: EPS and revenue growth
One of the most important takeaways from any quarterly release is earnings and revenue growth on a year-over-year basis. In both areas, Viacom delivered. Here is a quick look at the year-over-year highlights:
- Viacom's adjusted diluted EPS came in at $1.29, an 8% spike year over year.
- Top-line revenues rose 5% on a year-over-year basis, totaling $3.34 billion.
CEO Philippe Dauman commented on the quarter:
Viacom's focus on developing popular franchise properties and constantly expanding our growing international presence drove solid top-line results and record earnings per share this quarter. We continued to deliver increased revenues in our media networks operations driven by steady growth in affiliate revenues, and also benefited from Paramount Pictures' Oscar-nominated Interstellar and our very successful companywide franchise, Teenage Mutant Ninja Turtles.
The investor's view
Naturally, some investors will be concerned that Viacom's revenue missed analyst expectations of $3.41 billion. But actual revenue was still up substantially, to an impressive $3.34 billion, and it's best to not factor analysts' guesses into your analysis. Analysts are wrong about half of the time, so a miss for any company really isn't uncommon or significant unless the businesses fundamentals are declining. What's more important is that Viacom grew both sales and earnings year over year.
Still, the company has strong brands and is delivering value to investors. For the quarter, Viacom returned $887 million to shareholders through dividends and share repurchases. The dividend remains unchanged, yielding 1.9%, but Viacom is plowing money back into its share repurchases. It doubled its record buyback plan in 2013, to authorize a staggering $20 billion in repurchases. Viacom continues to up the ante of its impressive buyback plan, which makes sense considering shares trade at a relatively cheap P/E multiple of 12. When you consider that the company is delivering record profits and high returns on capital, while also returning considerable capital to shareholders, investors should be happy.