Viacom Inc., the media conglomerate controlled by Sumner Redstone, said Thursday its fourth-quarter profit fell 69% as the recession hurt advertising, home entertainment and videogame revenue and it recorded US$454 million in charges.
The owner of the MTV, Nickelodeon and Comedy Central cable networks and the Paramount movie studio said it earned $173 million, or 28 cents per share. That was down from $559.5 million, or 86 cents per share, in the year-ago quarter.
Excluding charges for programming writedowns and restructuring related to the reduction of 850 jobs, or 7% of its workforce, in December, Viacom earned 76 cents per share.
This is a penny less than expected by analysts surveyed by Thomson Reuters.
Revenue was flat at $4.24 billion—in line with analyst expectations—as advertising sales fell 3% globally to $1.35 billion.
Chief executive Philippe Dauman said marketers continued to pull back from its cable networks, although not as much as they have from other media such as local TV stations.
“It is clear that while as cable network owners we are in a more favourable media segment than most, advertising [comparisons] are likely to get worse before they get better,” he said.
Restructuring will save $200 million in 2009, he said.
Despite the ad decline, revenue from the company’s media networks rose 1% to $2.48 billion, as fees from cable and satellite operators grew 12% to $667 million. Ancillary revenues, including from the “Rock Band” videogame, were flat at $462 million.
Dauman blamed the “soft retail environment” for hurting hardware sales of the game, which came in below expectations.
Revenue from filmed entertainment, which includes studio Paramount Pictures, dipped 2% to $1.81 billion. The company said this was due mainly to a 6% drop in home entertainment revenue, which fell to $1.02 billion.
“The home entertainment market, as the most important revenue driver for the industry, was hit by the downturn at retail,” he said.
