Viacom chief rails against ‘naysayers’ as sales miss estimates

Viacom Inc chief executive Philippe Dauman railed at critics of his leadership after a fifth straight quarter missing Wall Street’s sales estimates, unnerving investors and sending the media company’s shares down more than 15 per cent to a four-year low.

They were Mr Dauman’s first public remarks since replacing the ailing 92-year-old Sumner Redstone as executive chairman last week, an appointment that was opposed by Mr Redstone’s daughter and greeted by scepticism by some investors.

“Our outlook and the facts have been distorted and obscured by the naysayers, self-interested critics and publicity seekers,” Mr Dauman said on a call with analysts following the results.

“I could not be more focused on getting Viacom’s stock price back to the much higher level enjoyed under my leadership just a short time ago,” he said.

Viacom and to a lesser extent CBS, both majority-owned by Redstone, have come under scrutiny in light of Mr Redstone’s declining health, which is the subject of a lawsuit brought by one of his ex-girlfriends.

Viacom’s shares are now down more than 45 per cent over the past 12 months. They were down 15.2 per cent at $35.51 in afternoon trading.

Lower advertising sales

For the first quarter of its fiscal 2016, the owner of MTV, Comedy Central, Nickelodeon and movie studio Paramount reported a steeper than expected drop in quarterly revenue, hurt by lower advertising sales in the United States.

It said domestic advertising revenue fell 4 per cent, as price increases were more than offset by a decline in traditional ratings at some networks.

That was slightly better than the consensus among analysts, who expected a 5 per cent decline. The drop was an improvement from the September quarter’s 7 per cent fall.

Total revenue declined 5.7 per cent to $3.15 billion, below the $3.26 billion Wall Street had expected.

Excluding some items, Viacom earned $1.18 per share, meeting analysts’ average estimate.

Some investors are sceptical that Mr Dauman can turn Viacom’s fortunes around. They were further disappointed yesterday by the company cutting its fiscal 2016 growth outlook for the fees it gets from affiliates to “low to mid single digits,” from its forecast last quarter of high single digits.

Mr Dauman’s next big test will be wrapping up talks with Dish Network Corp over whether the cable operator will continue to carry Viacom’s networks and at what price. Mr Dauman said negotiations have been extended and he expects an agreement.

Investors are also waiting for the outcome of a hearing scheduled for February 25th in a New York court determining whether Mr Dauman can be deposed as a witness in the legal dispute over Mr Redstone’s mental competence.