Q3 sees margin-driven beat
Revenue fell 4% (cons. -3%) while operating profit fell 5% (cons. -9%) and EPS actually rose 1% to $1.18 (cons. $1.07, -9%). Positives are 1) a sequential improvement in domestic affiliate fee declines, 2) strong ancillary revenue growth as Viacom diversifies into live events and consumer products 3) margin improvements at media networks and 4) the second positive OI at Paramount in 2.5 years. On the flip side, domestic advertising missed at -3% vs. AE -2% while international cable networks revenue was disappointingly flat (AE +13%). In terms of outlook, the release states that management see "an even stronger September quarter".Viacom provides entertainment through television, film, digital media, live events, merchandise and solutions. The company operates through two segments: Media Networks, which provides entertainment content, services and related branded products for consumers in targeted demographics attractive to advertisers, content distributors and retailers through its media brands including Nickelodeon, MTV, BET, Comedy Central and Paramount Network; and Filmed Entertainment, which develops, produces, finances, acquires and distributes films, television programming and other entertainment content through its Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television divisions.
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