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Viacom’s Q1 net earnings fall to $500 mn

MUMBAI: US media conglomerate Viacom has reported financial results for the first quarter ended 31 December 2014. Net earnings attributable to Viacom declined to $500 million from $547 million.

Quarterly adjusted net earnings attributable to Viacom declined by two per cent to $538 million, principally due to the four per cent negative impact of foreign currency exchange rates, as well as higher interest costs. Adjusted diluted earnings per share for the quarter increased by eight per cent to $1.29, a record for the fiscal quarter ended December 31. Foreign exchange had an unfavourable $0.05 impact on adjusted diluted EPS.

Revenues increased by five per cent to $3.34 billion, driven by high single-digit growth in domestic affiliate fees. $887 million was returned to shareholders through Dividends and Share Repurchases.

Viacom executive chairman Sumner M. Redstone said, “Viacom’s powerful entertainment brands continue to lead the way in reaching global audiences with groundbreaking content. Our outstanding management team has positioned Viacom for continued success.”

Viacom president, CEO Philippe Dauman said, “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 company-wide franchise, ‘Teenage Mutant Ninja Turtles’.

“The media business is evolving faster than ever, but our mission remains unchanged: to continually develop more and better entertainment programming and deliver it to our engaged audiences on every screen and on every platform worldwide. To maintain our leadership position, we will continue to innovate and to manage our business as effectively and efficiently as possible, embracing change and adopting new technologies to better measure and monetise our content and meet industry-wide challenges. Viacom is financially strong and extremely well positioned for the future, with the talent and the creativity to grow our core business and continue to deliver increasing value to our investors.”

Quarterly revenues rose by five per cent to $3.34 billion, driven by increases across the business. Media Networks revenues increased by four per cent to $2.65 billion, due to higher affiliate fees and advertising revenues. Domestic affiliate revenues rose 8% and worldwide affiliate revenues grew by six per cent, primarily due to rate increases. Domestic advertising revenues declined by six per cent, reflecting lower ratings. Worldwide advertising revenues rose by three per cent, reflecting a 60 per cent increase in international advertising revenues driven by contributions from Channel 5, which was acquired in September 2014. The four per cent increase in Media Networks revenues includes an unfavorable one per cent impact of foreign exchange.

Film revenues grew by six per cent to $720 million. Released theatrically in the fiscal fourth quarter of 2014, ‘Teenage Mutant Ninja Turtles’ remained a strong performer in the current quarter, complementing the current quarter releases and helping to drive a 6% increase in theatrical revenues and a 16 per cent gain in home entertainment revenues. Home entertainment revenues reflect two film releases in the current quarter, compared with none in the same prior year period. License fees declined by nine per cent resulting from the mix of available titles.