Viacom profit beats on cost cuts, success of ‘Bumblebee’
By Vibhuti Sharma
(Reuters) – Media company Viacom Inc beat quarterly profit estimates on Friday, as costs fell and its Paramount Pictures division gained from the success of its movies “Bumblebee” and “What Men Want”.
The Transformers movie spin-off “Bumblebee” has so far raked in more than $467 million globally, according to Box Office Mojo, while romantic comedy “What Men Want” has earned more than $72 million.
Since taking the helm in 2016, Chief Executive Officer Bob Bakish has focused on Paramount Pictures and the company’s cable TV business, which like its sister company CBS Corp, has been facing competition from Netflix Inc and Amazon.com Inc’s Prime video.
“Paramount CEO…has done a commendable job thus far in righting the ship, and view the move into TV production as a positive given the voracious demand for TV content by networks and streaming platforms,” Cowen and Co analysts said.
However, revenue at the unit that houses Paramount Pictures fell 1% to $730 million and missed estimates, weighed down by lower licensing revenue that offset higher income from its movie business.
Brokerage Cowen said it sees more challenges for Viacom’s movie business, given that it has fewer successful films.
The profit beat, which was also helped by a more than 11% drop in costs, sent the shares of the company up 1.4% in afternoon trading.
Viacom also looks to benefit from its recent acquisition of its ad supported streaming service Pluto TV, which had 16 million monthly active users by the end of April.
Comcast recently included Pluto TV in its internet streaming video service called Xfinity Flex and said its set top box that links TV and internet Xfinity X1 will also soon have the streaming service.
Revenue from media networks, which includes advertising sales and affiliate fees, fell to $2.27 billion and missed estimates of $2.32 billion.
Both Viacom and CBS, controlled by National Amusements, are expected to rekindle merger talks after CBS suspended the search for a permanent CEO and extended the role of its interim CEO Ianniello, sparking speculation about the company considering a tie-up with Viacom for the third time.
Net income attributable to Viacom rose more than 41% to 93 cents in the second quarter ended March 31. Excluding items, Viacom earned 95 cents per share and beat expectations of 80 cents. Total revenue fell over 6% to $2.96 billion and missed estimates of $3.06 billion, according to IBES data from Refinitiv.
(Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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