Viacom Reports $14-Million Loss in 2nd Quarter
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Viacom Inc. reported a second-quarter loss of $14 million, as problems at its Blockbuster video store chain offset gains at its MTV Networks music and children’s cable channels.
The loss translates to 8 cents a share, excluding a charge and a gain, contrasted with a profit from continuing operations of $26 million, or 3 cents a share, in the same period a year ago. Revenue rose 8.8% to $3.03 billion, from $2.79 billion.
The loss was narrower than the 14 cents average estimate of 22 analysts surveyed by First Call. It excludes a $203-million charge to write down the value of excess inventory at Blockbuster Entertainment Group and close some stores.
Blockbuster continues to be the major stumbling block for the New York-based entertainment company and is the main reason Viacom hasn’t kept pace with rivals Time Warner Inc. and Walt Disney Co. Analysts don’t expect Blockbuster to recover any time soon.
“The whole world is on a ‘show me’ with Blockbuster,” said Richard Read, an analyst at Arnhold & Bleichroeder.
Blockbuster is suffering from an industrywide 8% to 9% drop in video rentals in the last year. That has been exacerbated by management upheaval, distribution problems and a zigzag marketing strategy that failed, leading analysts to question Blockbuster’s future.
Viacom’s Class A shares rose 31 cents to close at $30.50 on the American Stock Exchange.
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