Back to top

Analyst Blog

Viacom Inc.’s (VIAB - Analyst Report) film division – Paramount Picture – is set to boost the company’s movie revenues with the release of the much anticipated flick, “Transformers: The Age of Extinction”. Released on Jun 27, 2014, the action film made a record $100 million domestic box office debut this weekend, comfortably surpassing the $95 million opening weekend collections of this year’s Captain America: The Winter Soldier.

The movie was released across 37 countries and garnered an impressive $300 million with China alone accounting for an all-time high of $90 million in revenues. Thus, with nearly $400 million collections worldwide, Paramount has recovered its production costs of around $210 million. Moreover, it garnered $27.3 million from IMAX Corporation (IMAX - Analyst Report) theaters.

Lack of popular movie releases and the approaching Jul 4 holiday weekend in the U.S. will further bolster box office revenue collections from the fourth part of the Transformers series. Taking these factors into consideration, we strongly believe that the movie is favorably positioned to cross the $1 billion mark and eclipse the performance of the previous release from the series – “Transformers: Dark of the Moon" – which collected nearly $ 1.12 billion.

The company’s successful movie franchise “Transformers” has garnered a total of $2.67 billion from the previous releases and has also outpaced the $3 billion mark with the the fourth flick.

In the recently concluded second quarter of fiscal 2014, Viacom’s Filmed Entertainment segment revenues deteriorated 12% year over year to $831 million. Global Theatrical revenues also decreased 17% year over year. Hence, with the release of the latest Transformer flick and two upcoming movies “Hercules” and “Teenage Mutant Ninja Turtles”, Theatrical revenues of Viacom will certainly gain considerable momentum in the fourth quarter of 2014.

Viacom currently carries a Zacks Rank #3 (Hold).

Other better-ranked stocks in the movie/TV production/distribution industries are Pearson Plc. (PSO - Snapshot Report) and The Walt Disney Company (DIS - Analyst Report), both of which carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.