) declared first-quarter 2014 financial results with the bottom
line beating the Zacks Consensus Estimate but the top line
missing the same.
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Net income from continuing operations in the reported quarter was
$547 million or $1.20 per share compared with $461 million or 91
cents per share in the prior-year quarter. The reported earnings
were above the Zacks Consensus Estimate of $1.15 per share.
Total revenue in the reported quarter was $3,197 million, down 4%
year over year and also below the Zacks Consensus Estimate of
$3,345 million. A substantial decline in Film Entertainment
Segment revenues led to the year-over-year decline. Quarterly
operating income was $960 million, up 20% year over year.
During the reported quarter, Viacom bought 10.3 million common
shares for $850 million. At the end of the first quarter of
fiscal 2014, Viacom had $1,417 million in cash & cash
equivalent and $11,868 million in outstanding debt on its balance
sheet compared with cash and cash equivalent of $2,403 million
and outstanding debt of $11,867 at the end of fiscal 2013. At the
end of the first quarter of fiscal 2014, the
debt-to-capitalization ratio was 0.71 against 0.69 at the end of
Media Networks Segment
Quarterly revenues of $2,541 million inched up 6% year over year,
mainly triggered by better advertising and affiliate revenues.
Quarterly operating profit was $1,114 million, up 8% from the
prior-year quarter. Both domestic and worldwide affiliate
revenues rose 10% year over year. On a year-over-year basis, both
domestic and worldwide advertising revenues rose 3% and 4%,
Filmed Entertainment Segment
Quarterly revenues fell sharply by 30% year over year to $681
million, mainly affected by fewer movie releases. Quarterly
operating loss was $74 million, up 47% year over year.
Global Theatrical revenues increased 52% year over year,
primarily due to less hit movie releases than the year-ago
quarter. Worldwide Home Entertainment fell 37% coupled with a 3%
decline in television license fees. However, Worldwide Filmed
Entertainment ancillary revenues rose 9%.
We believe that Viacom is well positioned for long-term growth as
it continues to benefit from its predominant cable networks-based
business model, strong affiliate fee revenue growth, increased
share repurchase plans and multi-platform content.
However, stiff competition from media companies like
Time Warner Inc.
) along with mounting debt may act as headwinds for the stock,
Currently, Viacom has a Zacks Rank #3 (Hold).