Viacom Inc., the owner of Paramount Pictures, MTV and Nickelodeon, on Friday said its net income fell 7 percent in the latest quarter as advertising revenue declined more than expected and its movie releases failed to measure up to last year's.
The results missed Wall Street estimates, and Viacom shares fell $1.83, or 4 percent, to $44 in premarket trading, below the level touched during the regular trading day this year.
Viacom earned $534 million, or $1.01 per share, in the April to June quarter. That compares with $574 million, or 97 cents per share, in the same period last year.
Excluding some one-time tax benefits, earnings were 97 cents per share in the fiscal third quarter, 3 cents below the average analyst estimate as polled by FactSet.
The New York-based company's revenue fell 14 percent to $3.24 billion, 7 percent below analysts' estimate of $3.49 billion.
Revenue fell 5 percent at Viacom's TV networks as U.S. advertising fell 7 percent. Viacom has been struggling with a ratings decline for key channels, particularly Nickelodeon. It says it's investing aggressively to create new hits. TV accounts for two-thirds of Viacom's overall revenue and nearly all of the profits.
Revenue dropped 29 percent at Paramount, which released three films in the quarter: "Madagascar 3: Europe's Most Wanted," "The Dictator" and "Titanic 3-D." In the same quarter last year, it had four blockbusters: "Kung Fu Panda 2," "Thor," "Super 8" and "Transformers: Dark of the Moon."