Viacom stock dives as Jon Stewart leaving Daily Show is paired with weak results
Viacom saw its shares plunge after the announcement that Jon Stewart would leave the Daily Show and it reported weaker-than-expected quarterly revenue.
Yesterday Jon Stewart signed off from the Daily Show after a decade and a half on Comedy Central.
His departure coincided with a the announcement of a series of weaker than expected results for Viacom, the owner of the network, which saw its stock dive as much as 18 percent to a near four-year low yesterday. Shares of Disney, Fox, Discovery and Time Warner also fell for the second straight day.
Viacom's results add to investor concerns over the U.S. cable industry after disappointing numbers from Walt Disney, Twenty-First Century Fox Inc, Discovery Communications Inc and Time Warner Inc this week.
Concerns over viewers cutting the cord on cable TV and moving online increased yesterday when Disney lowered its profit forecast for its cable business.
Viacom's advertising revenue fell 9 percent in its U.S. cable business, the fourth straight quarter of decline.
The company has been hurt by lower Nielsen ratings for some of its shows. Nielsen ratings, based on feedback from viewers, have long been the metric advertisers use to negotiate TV ad rates and make their decisions.
Viacom says that Nielsen ratings do not adequately reflect its viewership as viewers are shifting to digital platforms such as tablets and smartphones for their entertainment fix.
Revenue from Viacom's movie studio business, which includes Paramount Pictures Corp, fell 44 percent to $479 million. The company had benefited in the year-earlier quarter from the release of its blockbuster "Transformers: Age of Extinction".
Viacom's movie slate for the fourth quarter includes "Terminator: Genisys" and "Mission: Impossible - Rogue Nation", which are expected to drive revenue.
Net profit from continuing operations attributable to Viacom fell 3.3 percent to $591 million, or $1.47 per share, in the third quarter ended June 30.
Excluding items, Viacom earned $1.47 per share.
Revenue fell 10.6 percent to $3.06 billion.
Analysts on average had expected a profit of $1.47 per share and revenue of $3.22 billion, according to Thomson Reuters I/B/E/S.