Versant Media Group on Thursday unveiled outcomes for its most up-to-date quarter — its first as a stand-alone firm after separating from Comcast’s NBCUniversal and starting to commerce on the Nasdaq earlier this 12 months.
The report revealed continued stress within the conventional pay TV bundle however highlighted progress in digital platform and licensing companies.
Versant stock was up roughly 2.5% in mid-day buying and selling after earlier gaining as a lot as 12%.
Linear distribution income for its pay TV networks — which embrace CNBC, MS NOW and the Golf Channel in addition to USA, E!, Syfy and Oxygen — was down roughly 7% throughout the interval to $1.01 billion. The firm stated that was as a result of subscriber declines and partially offset by price will increase.
Advertising income for the primary quarter fell 5% to $368 million, which was thought of an enchancment from the identical interval final 12 months when it posted a 12% decline.
Revenue from content material licensing, nevertheless, rose 113.5% to $121 million, due largely to the licensing of the longtime actuality TV collection hit “Keeping Up With the Kardashians” and different associated content material to Disney’s Hulu.
Revenue from Versant’s platforms enterprise, which incorporates Fandango, GolfNow and a number of the already launched direct-to-consumer items, was up 9.5% to $192 million.
CEO Mark Lazarus stated on Thursday’s earnings name with buyers that the corporate goals to “build scale and expand our audiences” in direct-to-consumer.
“Yes, we hope that comes with a large base of subscribers, and we’ll gauge ourselves as [to] how do revenues look across all of our various forms of distributing content,” he stated.
Lazarus added that the corporate is working to ensure it grows “revenue diversification within each of our verticals.”
More than 80% of Versant’s income comes from the pay TV enterprise. However, executives have advised Wall Street that it goals to ultimately rebalance its income combine so that fifty% is derived from its digital, platform, subscription, ad-supported and transactional companies.
Overall income for the interval ended March 31 was down about 1% in contrast with the identical quarter final 12 months to $1.69 billion. Wall Street analysts polled by LSEG had anticipated income of $1.62 billion.
Net earnings attributable to Versant decreased 22% to $286 million, or $1.99 per share, for the quarter, which the corporate stated was as a result of decrease income, increased public firm prices and curiosity expense following the spinout from Comcast. This was partially offset by decrease taxes throughout the quarter, it stated.
Adjusted earnings earlier than curiosity, taxes, depreciation and amortization fell 7% from the identical interval final 12 months to $704 million.
When in contrast with stand-alone adjusted EBITDA, a metric to extra straight examine efficiency of the pre-spin portfolio firms to present outcomes, adjusted EBITDA was up about 5%, Versant stated. That was as a result of decrease leisure programming bills and decreased promoting, basic and administrative prices, which offset income declines.
Growth avenues
Versant has persistently touted its energy in sports activities and news. On Thursday the corporate highlighted viewership will increase for CNBC and MS NOW in addition to continued momentum for the Golf Channel and different stay sports activities and occasions on its networks.
The firm has been exploring progress via mergers and acquisitions, and acquiring extra sports activities rights. On Thursday, Lazarus stated Versant has been “looking in a variety of areas” on the subject of potential offers.
CFO and COO Anand Kini added throughout Thursday’s name that whereas exploring M&A stays part of Versant’s technique, the corporate can also be trying to preserve a wholesome steadiness sheet and is targeted on natural progress inside its companies.
“Our platforms revenue growth this quarter demonstrates that was really organic growth in GolfNow and Fandango,” Kini stated. “So we’re going to look when there’s opportunities that are inorganic, [but] they have a very high threshold even as they fit within those markets and those strategies.”
The firm additionally continued on its earlier pledge of returning capital to its shareholders, primarily as a result of its gentle debt load.
The firm on Thursday declared a quarterly money dividend for the second quarter in a row, every time at 37.5 cents per share. The new dividend is payable on July 22 to shareholders of file as of the shut of enterprise on July 1.
Versant additionally introduced that it expects to enter right into a $100 million accelerated share repurchase settlement, starting Friday, which it anticipates finishing throughout the second quarter. Versant repurchased almost 2.7 million shares of Class A standard stock throughout the first quarter, with a remaining authorization of roughly $900 million as of March 31, it stated.
Disclosure: Versant is the dad or mum firm of CNBC.