Viacom CEO: Paramount in 'Brief Income Slump'9 Feb, 2016 By: Erik Gruenwedel
Studio increases fiscal loss 143%, Viacom stock down
Paramount Pictures Feb. 9 reported a first-quarter (ended Dec. 31, 2015) operating loss of $146 million, which was up 143% from a previous-year loss of $60 million. Revenue dropped 15% to $612 million as a result of underperforming theatrical and home entertainment units.
Paramount Pictures Home Entertainment saw revenue decline $77 million (24%) to $239 million due to an unfavorable comparison with carryover revenue from Transformers: Age of Extinction in the first quarter of 2015.
Indeed, Transformers: Age of Extinction generated $62.3 million in combined DVD/Blu-ray Disc sales, to rank as the ninth top-selling title in 2014, according to The-Numbers.com.
Theatrical Q1 revenue decreased principally due to an unfavorable comparison with the strong performance of Teenage Mutant Ninja Turtles in the previous-year period. License fees increased 25%, to $237 million, driven by the licensing of certain titles for subscription video-on-demand services and television.
“2015 was a challenging year for [Paramount parent] Viacom, as it was for many in the industry,” CEO Philippe Dauman said on the company's fiscal call. [Paramount] has been, from a historical standpoint, in a brief income slump. Paramount is a valuable and significantly undervalued part of Viacom.”
Dauman said the studio’s fortunes would turn around with an increased release slate in 2016 of approximately 15 titles a year, including numerous tentpole titles.
The CEO, who recently assumed the chairman title with the retirement of Sumner Redstone, sought to soften the fiscal blow by characterizing the calendar year as a period that also saw new opportunities for the media company — notably overseas. He also criticized those who questioned Viacom’s future as well as his leadership.
“Our outlook and the facts have been distorted and obscured by the naysayers, self-interested critics, and publicity seekers. We will not be distracted or deterred as we build for the bright future ahead of us."
The executive said the board and Redstone believed “in my character” with the promotion to chairman, and the “weighty responsibilities” that accompany it. He said he would work tirelessly and leave no stone unturned in guiding Viacom forward.
When asked by an analyst what the board saw in his promotion, including holding the CEO position, Dauman said he was gratified the board overwhelmingly supported him.
“They know me. They know what our plans are. My singular objective is to protect and build value for all of Viacom’s shareholders.”
One plan included an agreement with Snapchat Discover to distribute Comedy Central internationally and MTV domestically.
“Viacom will also become the external ad sales representative for Snapchat’s advertising inventory, giving us the chance to offer even more value to our clients,” Dauman said.