2011 Earnings: Media Stocks Beat The DowYou can read the full article here on the official Deadline.com website.
YEARENDER: Wall Streeters throughout 2011 became starry eyed when they talked about tech stocks. But they still had a soft spot in their hearts for traditional media companies all year long. Five of the seven companies in the Big Media group beat the Dow Jones Industrial Average’s 6.1% increase (through December 29th) — four of them by a lot. And they weren't outliers: The Standard & Poor’s broadcasting index was +15.2% while the S&P movies and entertainment index was +10.2%. Many of the stocks were bolstered by the industry-wide improvement in ad sales. In addition, there was a general sense of relief — perhaps a pipe dream — that digital companies don’t yet pose a clear and present danger to the way traditional movie and TV companies do business. We’ll see how long that lasts.
Here’s how each of the Big Media companies fared in 2011, in order of how well the stock performed. Next to the company name is the percentage increase or decrease in the stock price this year as well as the price-earnings ratio (the stock price divided by the expected earnings per share) which is a rough measure to compare how cheap or expensive the stock is compared to its industry peers.
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Viacom (Stock: +13.8%, PE: 12.7) Viacom’s shares probably would have closed the year much higher if it weren't for the startling, and still perplexing, recent decline in Nickelodeon’s ratings. The drop in its live plus same-day audience accelerated from -5.4% in 3Q to -15.7% in October and -18.1% in November. CEO Philippe Dauman called the Nick situation a “blip,” touted the channel’s new programming plans, and questioned Nielsen's measurements. He also announced in November an eye-popping increase in Viacom's share repurchase authorization to $10B from $4B. Investors still want proof that Nick and other Viacom networks aren't running out of gas. That said, they liked a lot of other things that they heard from the company in 2011 including its strong upfront ad sales and new digital syndication deals. Movie service Epix became profitable. Paramount also had a great year at the box office with releases including Transformers: Dark Side Of The Moon, Thor, and Captain America: The First Avenger. Viacom probably will have to settle for less in 2012 as the Marvel titles shift to Disney. EPS (FY ended in September) $3.78, +25.2%.
Also, more from Deadline.com:
2011 Big Media: Recalling Moguls Lost YearYou can read the full article here on the official Deadline.com website.
YEARENDER: We’ll probably remember 2011 as a lost year for Big Media. Tech companies continued their drive to harness the Web in ways that could topple existing infotainment businesses. But most traditional media execs just smiled and said that their industry has nothing to fear but fear itself. You’ll go blind looking for major new initiatives, with one exception: Dish Network’s Charlie Ergen bought airwave spectrum and took Blockbuster out of bankruptcy as part of a plan to create a national video streaming service. Other companies didn’t even try to cut transformative deals although Comcast had its hands full trying to fix NBCUniversal, which the cable giant formally took over in January.
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Meanwhile the giants are grappling with unique concerns. For example: CBS may find it has nowhere to go but down following its recent success in ratings and ad sales. Comcast has the opposite problem at NBC; hits have eluded the network as its ratings continued to fall. Disney’s also struggling to boost ABC’s audience while its cash cow, ESPN, could face growing competition – including from Comcast, which hopes to turn its cable channel Versus into a sports power after January when it will be renamed NBC Sports Network. News Corp has to fend off investors calling for the company to ditch its declining newspapers, which include The Wall Street Journal. Time Warner has to prove that it can develop a film franchise strong enough to replace Harry Potter. And Viacom faces new questions about whether Nickelodeon can recover from its declining ratings, and Paramount can repeat this year’s strong performance at the box office with fewer releases to distribute from DreamWorks Animation and Marvel.
