"Teenage Mutant Ninja Turtles" is a leading television, motion picture and consumer product brand for Viacom. (Photo: Business Wire)
Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom's powerful entertainment brands continue to lead the way in reaching global audiences with groundbreaking content. Our outstanding management team has positioned Viacom for continued success."
Philippe Dauman, President and Chief Executive Officer of Viacom, said, "Viacom's focus on developing popular franchise properties and constantly expanding our growing international presence drove solid top line results and record earnings per share this quarter. We continued to deliver increased revenues in our media networks operations driven by steady growth in affiliate revenues, and also benefited from Paramount Pictures' Oscar-nominated Interstellar and our very successful company-wide franchise, Teenage Mutant Ninja Turtles.
"The media business is evolving faster than ever, but our mission remains unchanged: to continually develop more and better entertainment programming and deliver it to our engaged audiences on every screen and on every platform worldwide. To maintain our leadership position, we will continue to innovate and to manage our business as effectively and efficiently as possible, embracing change and adopting new technologies to better measure and monetize our content and meet industry-wide challenges. Viacom is financially strong and extremely well positioned for the future, with the talent and the creativity to grow our core business and continue to deliver increasing value to our investors."
Quarterly revenues rose 5% to $3.34 billion, driven by increases across the business. Media Networks revenues increased 4% to $2.65 billion, due to higher affiliate fees and advertising revenues. Domestic affiliate revenues rose 8% and worldwide affiliate revenues grew 6%, primarily due to rate increases. Domestic advertising revenues declined 6%, reflecting lower ratings. Worldwide advertising revenues rose 3%, reflecting a 60% increase in international advertising revenues driven by contributions from Channel 5, which was acquired in September 2014. The 4% increase in Media Networks revenues includes an unfavorable 1% impact of foreign exchange.
Filmed Entertainment revenues grew 6% to $720 million. Released theatrically in the fiscal fourth quarter of 2014, Teenage Mutant Ninja Turtles remained a strong performer in the current quarter, complementing the current quarter releases and helping to drive a 6% increase in theatrical revenues and a 16% gain in home entertainment revenues. Home entertainment revenues reflect two film releases in the current quarter, compared with none in the same prior year period. License fees declined 9% resulting from the mix of available titles.
Quarterly adjusted operating income of $959 million was flat versus the prior year. Media Networks adjusted operating income declined 1% due to higher programming expenses partially offset by revenue gains. Excluding the impact of foreign exchange, Media Networks adjusted operating income was flat for the quarter. Filmed Entertainment generated an adjusted operating loss of $60 million, an improvement of 19%, as higher revenues more than offset increases in film and distribution expenses.
Quarterly adjusted net earnings attributable to Viacom declined 2%, principally due to the 4% negative impact of foreign currency exchange rates, as well as higher interest costs. Adjusted diluted earnings per share for the quarter increased 8% to $1.29, a record for the fiscal quarter ended December 31. Foreign exchange had an unfavorable $0.05 impact on adjusted diluted EPS.
For the quarter ended December 31, 2014, Viacom repurchased 10.2 million shares under its stock repurchase program, for an aggregate purchase price of $750 million. As of January 28, 2015, Viacom had $5.62 billion remaining in its $20 billion stock repurchase program. As of December 31, 2014, Viacom had 407 million shares of common stock outstanding.
At December 31, 2014, total debt outstanding, including capital lease obligations, was $13.76 billion, compared with $12.77 billion at September 30, 2014. In the quarter, the Company issued $1.0 billion of debt, a portion of which it intends to utilize for the repayment of $600 million aggregate principal amount of the Company's senior notes due February 2015. The Company's cash balances were $1.2 billion at December 31, 2014, an increase from $1.0 billion at September 30, 2014.
You can read Viacom's press release announcing the company's quarterly earnings in full, including tables of Viacom's statements and balance sheets, here on BusinessWire.com.
In additional Viacom news:
Viacom recently announced that it has extended the employment agreement of President and Chief Executive Officer Philippe Dauman through December 31, 2018. The extension adds two years to Dauman's previous contract, which ran through December 31, 2016.
Viacom International Media Networks (VIMN) UK and Ireland, home to Nickelodeon, MTV, Comedy Central and Channel 5, is preparing to call a review of its £2 million media planning and buying services, after parting company with Omnicom's PHD.
Google Inc and Viacom Inc have won the dismissal of a nationwide privacy lawsuit accusing them of illegally tracking the Internet activity of boys and girls who visited Nickelodeon's website, in order to send targeted advertising. The lawsuit claimed that Viacom secretly kept track of children under the age of 13 who streamed videos and played video games on the networks official website, nick.com, and shared what it learned with Google. It said both companies then without permission put text files known "cookies" into the children's computers, letting them gather additional information that advertisers could use. The lawsuit was brought on behalf of young children who registered to use Nick.com. But in a Jan. 20 decision, U.S. District Judge Stanley Chesler in Newark, New Jersey found no showing that Google and Viacom could identify which children streamed specific videos or played specific video games, as opposed to identifying children generally. He also found no showing that the companies engaged in "highly offensive" behavior for which they could be held liable. "Children do indeed warrant special attention and heightened protections under our laws and social norms," Chesler wrote. "Although plaintiffs have identified conduct that may be worthy of further legislative and executive attention, they have not cited any existing and applicable legal authority" to support their claims, he added. The plaintiffs had accused Viacom of violating the federal Video Privacy Protection Act, and both companies of violating a New Jersey anti-computer hacking law.
Viacom is facing renewed calls on Wall Street to reunite with its former sibling CBS ahead of a high-stakes battle with Charlie Ergen's Dish over programming fees.
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