American media conglomerate Viacom swung to a loss in its second quarter, in part from a one-time restructuring charge of US$784 million, as well as declines in its Filmed Entertainment business and the impact of foreign exchange.
For the period ended March 31, 2015, revenue dropped 3% to US$3.08 billion, with a net loss of US$53 million, down from a profit of US$502 million in last year’s Q2.
Higher ad revenues and affiliate fees saw its overall Media Networks revenue rise by 3% to US$2.45 billion.
However, the company’s domestic ad revenue dropped 5% as a reflection of lower ratings. Worldwide ad revenue rose 4%, due to a 80% increase in international ad revenue largely driven by growth from UK-based Channel 5, which Viacom acquired in September.
The 3% gain at its cable networks was offset by a 21% revenue decline within the company’s Filmed Entertainment segment, which pulled in US$659 million. Declines in this segment were driven by decreases in television license fees and home entertainment revenue.
Theatrical revenue dropped 10%, due to lower carryover revenue from releases in the prior quarter. Revenue was lower despite the success of The SpongeBob Movie: Sponge Out of Water, which had earned US$162 million at the domestic box office as of April 28, 2015, according to film database Box Office Mojo.
Viacom’s second quarter was marked by a number of high-level layoffs in the company’s preschool and animation divisions. The layoffs were part of the media conglomerate’s restructuring efforts. According to Viacom CEO and president Philippe Dauman, the company’s strategic realignment is largely complete and he expects to see annual net savings of US$350 million, with US$175 million in savings expected for 2015.