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Viacom's Earnings Beat by a Penny

Zacks Equity Research

Viacom Inc. (VIAB) declared second-quarter 2013 financial results with the bottom line beating the Zacks Consensus Estimate but the top line falling short of the same.

Net income from continuing operations in the reported quarter was $481 million or 96 cents per share compared with $588 million or $1.08 per share in the prior-year quarter. Adjusted EPS of 96 cents surpassed the Zacks Consensus Estimate by a penny.

Total revenue in the reported quarter was $3,135 million, down 6% year over year and also below the Zacks Consensus Estimate of $3,216 million. Poor performance of the Filmed Entertainment business resulted in the slowdown in revenues. Quarterly operating income was $847 million, down 9% year over year.

During the reported quarter, Viacom bought 11.7 million common shares for $700 million. At the end of the second quarter of fiscal 2013, Viacom had $1,260 million in cash & cash equivalent and $8,915 million in outstanding debt on its balance sheet compared with cash and cash equivalent of $848 million and outstanding debt of $8,131 at the end of fourth quarter of fiscal 2012. Debt-to-capitalization ratio at the end of the reported quarter was 0.56 compared with 0.52 at the end of fiscal 2012.

Media Networks Segment

Quarterly revenue of $2,233 million inched up 2% year over year, mainly triggered by better advertising, affiliate and ancillary revenues. Quarterly operating profit was $873 million, down 2% year over year. Domestic affiliate revenues and worldwide affiliate revenues rose 3% and 2%, respectively. Domestic and worldwide advertising revenues jumped 2% year over year. 

Filmed Entertainment Segment

Quarterly revenue dropped 20% year over year to $941 million, hamstrung by lack of popular movie releases. Quarterly operating profit was $65 million.

Global Theatrical revenue fell 15% year over year, primarily due to poor movie releases than the year-ago quarter. Worldwide Home Entertainment slumped 38% coupled with steep fall in television license fees by 7%. However, Worldwide Filmed Entertainment ancillary revenues rose 3%.

Currently, Viacom has a Zacks Rank #3 (Hold).

Other Stocks to Consider

Certain other companies belonging to the same media sector that are yet to report financial results are CBS Corporation (CBS), The Walt Disney Company (DIS) and Time Warner Inc. (TWX).

Read the Full Research Report on VIAB

Read the Full Research Report on TWX

Read the Full Research Report on CBS

Read the Full Research Report on DIS

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