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Viacom (VIAB) Q2 Earnings Miss, Revenues Meet Estimates

Viacom Inc. VIAB announced second-quarter fiscal 2016 results wherein the bottom line missed the Zacks Consensus Estimate while the top line met the same.

Adjusted net income from continuing operations in the reported quarter was $303 million or 76 cents per share compared with $467 million or $1.16 per share in the prior-year quarter. The adjusted earnings figure also missed the Zacks Consensus Estimate of 79 cents.

Meanwhile, total revenue in the quarter came in at $3,001 million, down 3% year over year but in line with the Zacks Consensus Estimate. Lack of hit movie releases coupled with a strong U.S. dollar affected the top-line performance. Meanwhile, quarterly adjusted operating income came in at $586 million, down 29% year over year.

At the end of the second quarter, Viacom had $480 million of cash & cash equivalents and $11,496 million of outstanding debt on its balance sheet compared with $506 million and $12,267 million, respectively, at the end of fiscal 2015.

Segmental Performance

Media Networks

Quarterly revenues totaled $2,381 million, down of 3% year over year. Quarterly operating profits came in at $805 million, down 11% year over year. Both Affiliated fee and ancillary revenues fell 1% and 4%, respectively, on an annualized basis. Also, on an annualized basis, worldwide affiliate revenues improved 4% while domestic affiliate revenues dropped 2% year over year. On the other hand, on a year-over-year basis, both domestic and worldwide advertising revenues deteriorated 5% and 1%, respectively.

Filmed Entertainment

At this segment, quarterly revenues fell 1% year over year to $655 million. Global Theatrical revenues increased 6% year over year while home entertainment business revenues fell 21% on an annualized basis. However, TV license fees improved 17% year over year. Quarterly operating loss stood at $136 million, against an operating profit of $1 million recorded in the second quarter of 2015. Also, ancillary revenues declined 17% year over year.

Zacks Rank & Stocks to Consider

Currently, Viacom carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry are The Madison Square Garden Company MSG, AMC Networks Inc. AMCX and World Wrestling Entertainment Inc. WWE. All three carry a Zacks Rank #2 (Buy).

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WORLD WRESTLING (WWE): Free Stock Analysis Report
 
MADISON SQUAR-A (MSG): Free Stock Analysis Report
 
AMC NETWORKS- A (AMCX): Free Stock Analysis Report
 
VIACOM INC-B (VIAB): Free Stock Analysis Report
 
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