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Net income from continuing operations in the quarter was $643 million or $1.24 per share compared with $574 million or $1.00 per share in the prior-year quarter. Adjusted EPS of $1.24 was also above the Zacks Consensus Estimate of $1.17.
Total revenue in the reported quarter was $3,363 million, down 17% year over year and also below the Zacks Consensus Estimate of $3,428 million. Poor performance of the Filmed Entertainment business has resulted in the slowdown of revenue growth. Quarterly operating income was $1,050 million, increased 13% year over year.
During the reported quarter, Viacom bought 14.2 million common shares for $700 million. At the end of the fourth quarter of fiscal 2012, Viacom had $848 million in cash & cash equivalent and $8,131 million in outstanding debt on its balance sheet compared with cash and cash equivalent of $1,021 million and outstanding debt of $7,342 at the end of fiscal 2011. Debt-to-capitalization ratio at the end of the reported quarter was 0.52 compared with 0.46 at the end of fiscal 2011.
Media Networks Segment
Quarterly revenue of $2,290 million decreased 1% year over year, mainly hurt by weaker advertising and ancillary revenues. Quarterly operating profit was $933 million, down 3% year over year. However, domestic affiliate revenues and worldwide affiliate revenues rose 11% and 12%, respectively. Domestic advertising revenue dropped 6% year over year while worldwide advertising revenue fell 7% year over year.
Filmed Entertainment Segment
Quarterly revenue dropped 39% year over year to $1,087 million, hamstrung by lack of popular movie releases and lower home entertainment title releases. Quarterly operating profit was $195 million, up 5% year over year.
Global Theatrical revenue fell by a whopping 83% year over year primarily due to lackluster box office performance than the year-ago quarter. Worldwide Home Entertainment dipped 32% coupled with steep rise in television license fees by 19%. However, Worldwide Filmed Entertainment ancillary revenues jumped 21% to $147 million in the quarter, fuelled by higher digital revenues.
We believe that Viacom is well positioned for long-term growth as it continues to benefit from its predominately cable networks-based business model, strong affiliate fee revenue growth, strong share repurchase plan, multi-platform content, and is one of the fastest growing traditional ad media.
However, stiff competition from other media companies like News Corp. ( NWSA - Analyst Report ) and Time Warner Inc. ( TWX - Analyst Report ) along with flop movie releases and mounting debt may act as headwinds for the stock, going forward. We, thus, maintain our long-term Neutral recommendation on Viacom.
Currently, Viacom has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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