Viacom, the owner of MTV, Nickelodeon and Comedy Central, joined a parade of media companies reporting disappointing results, posting a third-quarter revenue decline on Thursday morning that was wider than analysts had forecast.
Revenue fell 11% to $3.06 billion in the period ended June 30, the company said. That missed the $3.23 billion average of 26 analysts' estimates tracked by Bloomberg. Profit, excluding some items, rose to $1.47 a share, in line with projections.
U.S. ad revenue fell 9% because of falling viewer ratings for the company's TV networks, Viacom said. At MTV, viewership is down 22% this season, based on Nielsen data. Comedy Central's audience is off 17%.
The results mark Viacom's fourth straight decline in U.S. advertising sales. The company, controlled by 92-year-old billionaire Sumner Redstone, has struggled with the drop in ratings and questions about the health of the cable-TV industry. Walt Disney Co. reported results this week that raised questions about the industry growth, dragging down stocks including Time Warner Inc. and Discovery Communications Inc.
The S&P 500 Media Index slumped 6.3% on Wednesday, led by a 12 percent loss for Discovery and declines of 9 percent at both Disney and Time Warner Inc. It was the biggest drop since August 2011. Viacom fell 7.5 percent to $51.41.
CBS Corp. and 21st Century Fox, which reported results after Wednesday's close, failed to allay investor concerns. Shares of both companies declined after-hours.
Viacom has staked future growth on international expansion. The company last week acquired a 50% stake in the Prism TV Pvt Ltd., which owns and operates regional entertainment channels in India. It acquired U.K. broadcaster Channel 5 last year.
~ Bloomberg News ~