Back to top

Image: Bigstock

Viacom (VIAB) to Report Q4 Earnings: What's in the Cards?

Read MoreHide Full Article

Viacom is slated to report fourth-quarter fiscal 2018 results on Nov 16.

Notably, Viacom beat the Zacks Consensus Estimate in three of the trailing four quarters, with the average positive earnings surprise being 6.07%. In the last reported quarter, the company’s earnings of $1.18 per share beat the Zacks Consensus Estimate by 11 cents.

Viacom’s top line beat the consensus mark in two of the trailing four quarters. In the last reported quarter, revenues of $3.24 billion lagged the Zacks Consensus Estimate of $3.27 billion.

However, projections for fourth-quarter fiscal 2018 look encouraging. The Zacks Consensus Estimate for fourth-quarter earnings of 95 cents per share indicates an increase of 23.4% year over year. The consensus estimate for sales is pegged at $3.34 billion, indicating year-over-year increase of 0.6%.

Let’s see how things are shaping up prior to this announcement.

Will Paramount Continue its Profit Streak?

The turnaround of Paramount with its continued box office success is benefiting Viacom. In third-quarter fiscal 2018, A Quiet Place and Book Club significantly contributed to the domestic box office. Together both the films earned more than $250 million, with a production and acquisition cost of about $30 million.

Given the success of Mission Impossible: Fallout, released during fourth-quarter fiscal 2018, Paramount’s profits are likely to rise. Notably, the movie collected nearly $330 million globally in its first two weekends in many key markets including China.

Further, Paramount TV’s launch of Tom Clancy’s Jack Ryan on Amazon‘s (AMZN - Free Report) Prime and Maniac on Netflix (NFLX - Free Report) is expected to boost Licensing revenues in fourth-quarter fiscal 2018.

Notably, in third-quarter fiscal 2018, Paramount Television content including the second season of 13 Reasons Why and The Alienist substantially benefited Licensing revenues, which increased 35% year over year to $404 million. Moreover, Paramount TV is expected to generate revenues of $400 million in fiscal 2018.

Viacom Inc. Price and EPS Surprise

Viacom Inc. Price and EPS Surprise | Viacom Inc. Quote

Media Networks

Increasing investments in original content and focus on providing quality entertainment resulted in audience growth for Viacom’s flagship brands like MTV, BET and Comedy Central.

Management stated that MTV was the fastest growing network in primetime among the top 50 broadcast and cable channels in the Adults 18-34 demo in third-quarter fiscal 2018. The second season premiere of Floribama Shore in July 2018 had nearly 1 million viewers, with ratings up in double digits from its series debut.

Additionally, ratings picked up for Nickelodeon on new programming content including the likes of Double Dare. Notably, the premiere week of Nickelodeon’s Double Dare averaged 1.4 million viewers, making it the most-watched series debut on kids’ TV so far in 2018.

Moreover, Viacom’s efforts to expand its international footprint by launching Nick Japan and Japan MTV Mix on Amazon Prime coupled with deals with mobile carries in Europe is expected to boost its international affiliate revenues, which declined 2% to $175 million in the last reported quarter.

Further, Viacom is rebuilding relationships with distribution partners like AT & T (T - Free Report) and carriage partners like Charter and Suddenlink. This is expected to aid the domestic affiliate business, which decreased 3% year over year to $978 million in third-quarter 2018.

However, investments in original content are expected to hurt margins. Moreover, exposure to foreign currency fluctuations especially Argentinian peso due to ownership of Telefe does not bode well.

Viacom currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Hottest Tech Mega-Trend of All  

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Amazon.com, Inc. (AMZN) - free report >>

AT&T Inc. (T) - free report >>

Netflix, Inc. (NFLX) - free report >>

Published in