Viacom Meets Estimates

Viacom Inc. ( VIAB - Analyst Report ) declared first-quarter 2013 financial results, where the bottom line met the Zacks Consensus Estimate but the top line fell short of the same.

Net income from continuing operations in the reported quarter was $473 million or 93 cents per share compared with $591 million or $1.06 per share in the prior-year quarter. However, adjusted EPS of 91 cents was in line with the Zacks Consensus Estimate of $1.17.

Total revenue in the reported quarter was $3,314 million, down 16% year over year and also below the Zacks Consensus Estimate of $3,547 million. Poor performance of the Filmed Entertainment business has resulted in the slowdown of revenue growth. Quarterly operating income was $797 million, down 22% year over year.

During the reported quarter, Viacom bought 13.3 million common shares for $700 million. At the end of the first quarter of fiscal 2013, Viacom had $671 million in cash & cash equivalent and $8,371 million in outstanding debt on its balance sheet compared with cash and cash equivalent of $848 million and outstanding debt of $8,131 at the end of fourth quarter of fiscal 2012. Debt-to-capitalization ratio at the end of the reported quarter was 0.54 compared with 0.52 at the end of fiscal 2012.

Media Networks Segment

Quarterly revenue of $2,394 million inched down 2% year over year, mainly hurt by weaker advertising revenues. Quarterly operating profit was $1,021 million, down 9% year over year. However, domestic affiliate revenues and worldwide affiliate revenues rose 4% and 3%, respectively. Domestic and worldwide advertising revenue dropped 6% year over year.

Filmed Entertainment Segment

Quarterly revenue dropped 37% year over year to $975 million, hamstrung by lack of popular movie releases and lower home entertainment title releases. Quarterly operating loss was $142 million.

Global Theatrical revenue fell by a whopping 42% year over year primarily due to poor movie releases than the year-ago quarter. Worldwide Home Entertainment slumped 43% coupled with steep fall in television license fees by 24%. However, Worldwide Filmed Entertainment ancillary revenues fell by 14%.

Currently, Viacom has a Zacks Rank #3 (Hold).

Other Stocks to Consider

Certain other companies belonging to the same media sector that are yet to report financial results are CBS Corporation ( CBS - Analyst Report ) , News Corp. ( NWSA - Analyst Report ) and Time Warner Inc. ( TWX - Analyst Report ) . All the three have a Zacks Rank #3 (Hold).