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Viacom reports record profit for fiscal 2014
MUMBAI: US media conglomerate Viacom has reported full-year adjusted operating income rise of five per cent to a record $4.13 billion.
Full year adjusted diluted EPS rose by 15 per cent to a record $5.40,
Revenues for the fiscal were $13.78 billion, substantially unchanged from the previous year, as higher Media Networks revenues were offset by lower film revenues.
Media Networks revenues rose by five per cent to $10.17 billion, reflecting a 10 per cent increase in affiliate fees and a two per cent gain in ad revenues driven by higher international advertising revenues. Film revenues decreased by 13 per cent, principally due to lower revenues across the distribution windows reflecting the number and mix of films.
Full-year adjusted operating income increased by five per cent, to $4.13 billion, a record for the company.
Media Networks adjusted operating income increased $175 million, or four per cent, driven by higher revenues partially offset by an increase in expenses. Film adjusted operating income decreased $29 million, reflecting the contribution of Marvel distribution rights sales in the prior year. Corporate expenses decreased by 10 per cent in the period, primarily due to lower deferred compensation costs.
Full-year adjusted net earnings from continuing operations attributable to Viacom increased by three per cent, to $2.38 billion. The increase resulted from higher adjusted operating income, higher equity in net earnings of investee companies and a lower effective income tax rate, partially offset by an increase in interest expense and higher net earnings attributable to noncontrolling interests. Adjusted diluted earnings per share from continuing operations increased by 15 per cent to $5.40.
Fourth quarter 2014 revenues were up by nine per cent driven by affiliate fees and film revenues. Full-year adjusted operating income grew by five per cent to a record $4.13 billion and adjusted net earnings from continuing operations attributable to Viacom rose by three per cent to $2.38 billion. Full-year adjusted diluted earnings per share from continuing operations increased by 15 per cent to an all-time high of $5.40.
Quarterly media networks revenues grew by eight per cent to $2.66 billion, principally due to growth in affiliate fees. Domestic and worldwide affiliate revenues increased by 21 per cent and 22 per cent, respectively, primarily due to rate increases and higher revenues related to the timing of available programming from certain distribution agreements.
Excluding the impact of these arrangements, the domestic affiliate revenue growth rate was in the high single digits. Domestic ad revenues declined by five per cent, reflecting ratings challenges. Worldwide advertising revenues decreased by two per cent, reflecting the domestic decline partially offset by a 33 per cent increase in international advertising revenues. International advertising revenues benefited from the acquisition of Channel 5 on 10 September 2014.
Film revenues grew by 12 per cent to $1.36 billion, due to growth in theatrical revenues. Strong results from current quarter releases and the carryover performance of ‘Transformers: Age of Extinction’ drove theatrical revenues up 226 per cent to $557 million. Home entertainment revenues declined by 38 per cent, reflecting two fewer releases in the current quarter.
Viacom executive chairman Sumner M. Redstone said, “As we conclude another fiscal year, Viacom remains well-positioned as a creative leader with many of the world’s most innovative media properties and best entertainment brands.”
Viacom president, CEO Philippe Dauman said, “Viacom’s record financial results in 2014 demonstrate the strength of our brands and continuing momentum for our strategy of investing in creativity, with a relentless focus on growing demographic and geographic markets and embracing new distribution platforms. Our Media Networks achieved continued growth in the fourth quarter and the fiscal year. 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.
“We also continue to take the lead in defining the next generation of measurement tools that will more fully capture the growing multiplatform engagement of our audiences. Our September acquisition of Channel 5 has already made a positive impact on our business, and points the way to further significant long-term growth of our international business. Paramount delivered the top movie of 2014 and the largest-ever theatrical release in China – Transformers: Age of Extinction – and the studio successfully launched another long-term franchise with the Teenage Mutant Ninja Turtles.
“This performance allowed us to continue the strong delivery of value directly to investors. Over the past five years, Viacom has returned $16.1 billion to shareholders.”