Viacom reported fourth-quarter results that missed analysts' estimates as advertising sales at its U.S. cable networks declined and the Paramount film studio failed to match last year's hit "Transformers: Age of Extinction."
Domestic ad sales dropped 7% due to lower TV ratings. That was less than the 8% decline analysts had predicted.
Viacom has suffered steeper declines in domestic TV advertising than some peers as more of the young viewers who watch its cable networks go online for entertainment. The audience at Comedy Central this fall has declined more than 30% among viewers aged 18-to-49 from a year ago, according to Nielsen data. MTV is down 12%.
Viacom's audience is "skewed towards younger audiences, where media platform preferences are most dynamic, meaning (we think) Viacom will have a harder time monetizing those audiences through advertising," Brian Wieser, an analyst at Pivotal Research Group who recommends the stock, wrote in an Oct. 20 note.
The company has been relying on its data product Vantage to beef up ad sales. CEO Philippe Dauman said in a call with Wall Street analysts that Viacom is currently working with 11 major advertisers for its Vantage product and expects to triple the number of deals by next year's upfront.
Profit was $1.54 a share excluding some items, the New York-based owner of MTV and Comedy Central said Thursday in a statement. Analysts were forecasting $1.55, the average of estimates compiled by Bloomberg. Sales declined to $3.79 billion in the period ended Sept. 30, missing the $3.88 billion average of estimates.
Sales at the Paramount Pictures division declined 24% from a year earlier, when the studio benefited from the latest "Transformers" film and "Teenage Mutant Ninja Turtles."
-- Bloomberg News with Ad Age