Viacom Ad Revenue Slides on Lower TV Ratings

MTV and Comedy Central Audiences Down 10% Among 18-to-49-Year-Olds

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Viacom, the owner of the MTV and Comedy Central cable TV networks, posted first-quarter revenue that trailed analysts' estimates as domestic advertising slowed.

Revenue increased 4.6% to $3.34 billion in the period ended Dec. 31, Viacom said Thursday in a statement. Analysts had projected $3.4 billion, the average of estimates compiled by Bloomberg.

Viacom generates most of its sales and profit from TV networks, which get paid by advertisers. In the current TV season, audiences at MTV and Comedy Central have declined more than 10% in the 18-to-49-year-old demographic, according to Nielsen data. The company said Thursday it will offer Nickelodeon kids network online for a fee, joining HBO in targeting the growing number of consumers who watch TV on smartphones and other devices.

"These new tools allow us to distribute video in strategic ways, unlocking significant revenue potential," said Philippe Dauman, Viacom's president and chief executive officer.

Domestic ad revenue in the quarter slipped 6% amid lower TV ratings, Viacom said. Worldwide advertising revenue rose 3%. Filmed entertainment revenue advanced 5.7% to $720 million, helped by features such as "Teenage Mutant Ninja Turtles."

More acquisitions
Profit excluding items was $1.29 a share, Viacom said. That met analyst predictions based on an average of 28 estimates, according to data compiled by Bloomberg.

Mr. Dauman said the company will slow its stock repurchasing program. The funds will instead be used for acquisitions, such as a recent deal for five channels in India.

"This does not detract from our steadfast, long-term commitment to return capital to shareholders," Dauman said Thursday.

Net income for the quarter fell 8.6% to $500 million, or $1.20 a share, hurt in part by the strengthening of the dollar against other currencies. Viacom generated about 15% of its fiscal 2014 sales in Europe, according to data compiled by Bloomberg.

While the dollar's climb is reducing profits at U.S. companies from Procter & Gamble Co. to Pfizer and Microsoft, more than 77% of Standard & Poor's 500 Index members have still beaten analysts' estimates so far this earnings season, according to data compiled by Bloomberg.

~ Bloomberg News ~

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