Viacom (VIAB) has had a tough year, struggling with declining ratings and advertising revenue. Viacom just released its fourth-quarter results.
Was Viacom able to maintain steady profits and is VIAB stock a good buy?
Viacom – Company Profile
Viacom is a media network that reaches 700 million subscribers worldwide. Viacom’s brands include MTV, Nickelodeon, VHI, Comedy Central and BET. Paramount Pictures also falls under Viacom’s umbrella.
Viacom employs 10,000 full-time employees and is responsible for a number of hit movies, including Teenage Mutant Ninja Turtles, Transformers: Age of Extinction, Star Trek Into Darkness and Interstellar.
Viacom – Earnings Rundown
In the fourth quarter Viacom’s posted net earnings of $732 million, down 9% from $804 million the previous year. Viacom reported earnings-per-share of $1.72, outperforming analysts’ EPS estimates of $1.68 for the quarter. Revenue for the quarter increased 9% year-on-year to $3.99 billion; this also beat consensus estimates of $3.90 billion in revenue.
A bright spot for Viacom was Filmed Entertainment revenues, which jumped 12% year-on-year to $1.36 billion. The box office success of Transformers: Age of Extinction accounted for the bulk of theatrical revenue growth. As for the fiscal year 2014 results, Viacom’s net earnings dipped slightly to $2.39 billion.
Meanwhile, Viacom’s EPS increased from $4.68 last year to $5.40 per share this year.
Viacom – Current Ratings
Viacom had a pretty solid start to the year, maintaining a buy ranking until May. Since then, Viacom has seen deteriorating buying pressure. Viacom currently receives a “F” for its Quantitative Grade.
VIAB’s fundamental metrics are faring better. Viacom’s cash flow and return on equity are especially strong, earning “As.” Operating margin growth is also a solid metric for Viacom, earning a “B.” Viacom could improve in earnings growth (C), earnings momentum (D), earnings surprises (D), and analysts’ earnings revisions (C). Sales growth needs the most work, receiving a dismal “F” grade. Overall, Viacom earns a “C” for its total Fundamental Grade.
I consider VIAB a “F-rated strong sell.” While Viacom does appear to be on the mend, I cannot recommend VIAB stock in good conscious until buying pressure improves.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
