Revenues of Viacom Inc. (NASDAQ:VIA) Drop Due to a Reduction in Film Studio Business

Viacom Inc. (NASDAQ:VIA), one of the biggest media groups that not only owns a principal film studio but also possess a chain of television networks on cable, including Nickelodeon, Comedy Central and the much popular MTV, recently posted its latest quarter’s earnings reports. The company saw a decrease of 5.1 percent in its profits for the recent quarter. This decrease resulted due to a reduction in the business of Viacom Inc.’s (NASDAQ:VIA) film studio.

The revenue for the third fiscal quarter of the company that ended on 30th June dropped down by 7 percent and came to a total of $3.4 billion. The decline in the revenues from the film studio business was slightly compensated by increased sales in the television entertainment group category. The shares of the company fell by 1 percent as the EPS of $1.40 per share missed the analysts’ predictions.

Chief executive officer of Viacom Inc. (NASDAQ:VIA), Philippe Dauman, in a conference with the press, said that the company plans on investing around $3 billion in its content services. According to Dauman, this investment will not only boost growth in the region of United States but it will also increase the company’s business all around the world. He further disclosed that the company is planning on increasing the revenue generation through digital outlets, by selling ads as well as the content. The company’s film studio has many films in the tube, and thus the chances are that its business will increase in the upcoming quarter.

According to the CEO, Viacom Inc.’s (NASDAQ:VIA) audience is enjoying the company’s programs all around the globe: not only are they loving the shows that its channels’ broadcast but they also love the innovative commercial ads.

The revenue from the film studio decreased by 26 percent when the figures are compared with the numbers of the same quarter a year back, mainly because of a different theatrical situation. The company released Transformers: Age of Extinction this year, whereas last year, it released World War Z, Star Trek Into Darkness and Pain & Gain.

Coming to the revenues from the media network sector of the company, the revenues increased by 1 percent, mainly due to ascension in its adverting business: however, the numbers were still lower than the estimates.

Barclay’s analyst, Kannan Venkateshwar, in a research note, said that Viacom Inc.’s (NASDAQ:VIA) weak ratings together with its lower advertising business do not look well on its portfolio.

Kanna, however, showed enthusiasm on the fact that the company has scheduled a number of new shows on Nickelodeon and is about to complete its deal with Channel 5, a British television network.

The CEO of the company mentioned that Viacom’s separation from CBS has proved beneficial for the both companies since Viacom and CBS are both outperforming. He further mentioned that the company has leverage upon affiliate fee conciliations since Viacom has millions of young audience, making up a large portion of company’s user base.

Viacom Inc. (NASDAQ:VIA), on the last trade day, August 6, opened its stocks at a price of $81 and closed at a price of $80.39, after hitting the figures of $81.33.