Q2 media earnings turn in mixed results Michelle Clancy

Q2 media earnings turn in mixed results
Michelle Clancy
| 11 August 2018

It was a big week for earnings at media and video companies, with Univision, Roku, Hulu, Viacom and Avid all releasing numbers for the quarter ended in June.

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Hispanic broadcaster Univision, which is wrestling with carriage woes and a management shakeup, announced higher second-quarter earnings, even though revenue declined.

Its profit came in at $114.3 million – up 8% from $106.1 million a year ago – mainly thanks to lower interest and tax payments. However, adjusted operating income declined 7.5% to $304.1 million, and revenue dropped 2% to $749.8 million, including a 7.3% drop in ad revenue.

“Despite a rapidly evolving media landscape, the company has a lot to be optimistic about and an incredibly strong foundation to build from,” said Univision CEO Vince Sadusky, who is new to the job. Univision’s previous CEO, head of content and chief revenue officer have all left recently. “We provide unparalleled access to a coveted and fast-growing consumer group with increasing buying power. While our foundation is strong, Univision has gone through a significant amount of change over the last few months. We are starting an exciting new chapter with a singular focus on our core business and mission: to inform, entertain and empower Hispanic America.”

Meanwhile, Hulu’s losses expanded a whopping 135% in the June quarter, losing $423 million thanks to spending on its original content proposition and the Hulu with Live TV skinny TV bundle. The losses can be extrapolated from Fox’s earnings this week; Rupert Murdoch’s company is a 30% shareholder in Hulu and it reported Hulu losses of $127 million in the quarter, up from $54 million a year ago.

Roku had a better story: The set-top streaming box-maker grew second-quarter revenue by 57% to reach nearly $157 million; that beat analyst expectations. Roku was expected to report a loss of 15 cents per share on revenue of $141 million. Platform revenue (including ad sales) was up 96% during the period to $90.3 million; revenue from sales of the Roku player and the Roku Streaming Stick was up 24% to $66.5 million.

Going forward, it said that it expects the momentum to continue, forecasting revenue of $164 million to $172 million for the third quarter and full-year revenue of $710 million to $730 million.

"We continue to see strong engagement and monetisation of our growing account base," the company said in its earnings letter, adding that it will soon expand its Roku Channel to be available for online streaming for people that don’t own Roku devices.

Viacom’s fiscal Q3 results were mixed; total revenue fell 4% year-over-year to $3.2 billion, thanks to declines in both the Media Networks and Filmed Entertainment segments, including the Paramount film studio. Filmed Entertainment saw domestic revenue climb 20% from last year, but internationally, revenue fell 33%.

Viacom's adjusted operating income declined 8%, but adjusted earnings of $1.18 per share were slightly up because of the tax cut.

And finally, video editing giant Avid’s second-quarter 2018 earnings saw total GAAP revenue for Q2 2018 come in at $98.6 million, a decline of 4% versus Q2 2017 and a slight increase of 1% compared to the first quarter of 2018. Net losses however for the quarter were $8.5 million.

“Now among my priorities in the first hundred days as CEO was to ensure that Avid has the right management across all functions of our organization to effectively lead us forward and to have the right level of operational execution and focus on business performance. I’m quite happy to inform you that the complete executive management team is now fully in place with the transition being quite swift and successful” said Avid CEO Jeff Rosica.

“Avid’s business has evolved to be more software-oriented,” said Avid’s CFO Ken Gayron offered the following, However, our financial reporting has not kept pace. As the new CFO, I am introducing a transparent and more detailed depiction of Avid’s revenue streams today that better maps to our business.”