Viacom (NASDAQ:VIA) reported a sharp drop in third-quarter earnings and sales that both fell short of expectations on Friday as advertising declined.
The New York-based operator of MTV, BET and Nickelodeon television channels reported net earnings of $523 million, or 99 cents a share, compared with a year-earlier $574 million, or 97 cents.
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Excluding one-time items Viacom earned 97 cents, missing average analyst estimates in a Thomson Reuters poll by three cents.
Revenue for the three months ended June 30 was $3.24 billion, down 14% from $3.77 billion a year ago, missing the Street’s view of $3.49 billion.
Sales were impacted primarily by a 7% drop in U.S. advertising revenue and a 29% fall to $1.01 billion at Viacom’s Paramount film studio, partially offset by tighter expenses. Media networks sales declined by 5% to $2.27 billion, but the company said it sees an improvement in domestic advertising in the current quarter.
The cable TV channel operator reached an agreement over programming fees with DirecTV (NYSE:DTV) last month that ended a blackout of some of Viacom's most popular channels like MTV and Nickelodeon.
"Despite challenging year-on-year comparisons with last year's strong third quarter, Viacom remains committed to pursuing its long-term strategy of international expansion, continued programming investment and ongoing focus on operational discipline,” Viacom CEO Philippe Dauman said in a statement.
Looking forward, the company plans to continue its focus on operating efficiently by narrowing costs and streamlining the business while it expands into new markets. Dauman said Viacom will “over time, return significant value to shareholders."