Philippe Dauman, the newly-appointed Chairman of Viacom (NYSE: VIAB) hit the critics of the company’s management and promised its stock price would rebound to its previous highs during a conference call with investors on Tuesday.
Last month, Springowl Asset Management demanded a new management for Viacom due to its chronic underperformance and suggested that the company needs a greater focus on digital media to boost the stock.
The activist investor called for the resignation of Mr. Dauman as CEO to “allow a creative culture to sprout at Viacom.” It also pushed for the resignation of Sumner Redstone as Chairman of Viacom. The 92-year old billionaire, who controls 80% of the company’s voting stock, stepped down last week. However, the Board of Directors of Viacom unanimously elected (10-1) Mr. Daumann to replace Mr. Redstone as Chairman.
The only person who opposed Mr. Dauman’s appointment was Shari Redstone, the daughter of the billionaire. She called for an independent executive to lead the company. Mr. Dauman is a member of Mr. Redstone’s trust.
During the conference call, Mr. Dauman emphasized that his “singular objective is to protect and build value for all Viacom’s shareholders, and in doing so, for all the beneficiaries of Sumner’s trust — not only including the descendants of his daughter but also those of her brother.”
Management is building a bight future for Viacom
Mr. Daumann said, “Our outlook and the facts have been distorted and obscured by the naysayers, self-interested critics, and publicity seekers. We will not be distracted or deterred as we build for the bright future ahead of us.”
The Viacom Chairman said he will bring the stock price of the company to the “much higher level I enjoyed under my leadership just a short time ago.”
The media giant owns MTV, Nickelodeon, Comedy Central, Paramount Pictures and other multimedia brands.
Inventors seemed unconvinced
It appears that investors were not convinced by Mr. Daumann statement that he could drive Viacom towards recovery. The company’s stock plummeted more than 21% to $32.86 per share today.
Over the past 52 weeks, the stock price of Viacom declined from its highest level of $73.52 per share to its current trading. The media giant lost 51% of stock value over the past year.
Viacom quarterly results
Viacom reported that its adjusted earnings declined 9% to $1.18 per share for the fiscal 2016 first-quarter ended December 31, 2015. The company recorded adjusted earnings of $1.29 per share in the share period a year earlier.
The company’s quarterly adjusted operating income was $839 million, down from 959 million and its revenue fell 6% to $3.15 billion from $3.34 billion in the year-ago quarter.
Mr. Dauman said 2015 was a challenging year for the media giant as it redesigned itself and adapted to significant industry disruption. According to him, the company’s first quarter results reflected those challenges.
According to him, Viacom’s strategic innovations and investments in content technology are beginning to bear fruit and he is confident that the company will continue to build a positive momentum this year.
Viacom inks global partnership with Snapchat
Separately, Viacom announced its global partnership with Snapchat, the video messaging app developer.
Under the agreement, Viacom’s Comedy Centrak International channel and MTV channel in the US will be added top Snapchat Discover. The video messaging app developer also granted the media giant the right to sell its U.S. owned and operated advertising inventory.
On the other hand, Snapchat obtained an expanded access to Viacom’s high-profile Awards Shows to be able to produce more Live Stories.
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