Viacom Q1 Results Disappoint

Ad Revenue Dips 4%
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Viacom executive chairman and CEO Philippe Dauman, coming off his own "annus horriblis" in 2015, didn't find much solace in the first quarter of fiscal 2016, as low ratings and a slumping ad market continued to pressure the media giant.

About a week after former executive chairman Sumner Redstone handed the baton to Dauman, and after receiving a 22% increase in total compensation in fiscal 2015, Dauman tried to put an optimistic face on what was a disappointing quarter, with consolidated revenue down 6% to $3.15 billion.

Media Networks, which includes cable channels MTV, Comedy Central and Spike, saw revenue decline 3%, fueled by a 4% dip in domestic ad sales. International ad sales were down 2%, mainly a result of a strong dollar. Excluding the impact of foreign exchange, international ad revenue would have increased by 6% in the period.

Declining ratings and a viewership that is increasingly replacing linear TV with online and mobile content have pressured the company for more than a year. That, and Redstone's declining health and questions around succession at the company, have weighed heavily on Viacom stock, down 45% in 2015.

Dauman has made changes, shaking up management last year and pumping more money into original content, and the Viacom chief said in a statement that those efforts are beginning to show results. Ratings at most of its networks are beginning to show improvement, and Nickelodeon has recaptured its crown as the top network for kids ageds2-to-11.

"2015 was a challenging year operationally as we redesigned ourselves and adapted to significant industry disruption," Dauman said. "Our first fiscal quarter of 2016 reflected these challenges. However, our revitalized organization and our investments in content, technology and strategic innovation are now beginning to bear fruit. Although our industry continues to face headwinds, we expect our positive momentum to continue and build throughout the year."

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