Paramount Pictures Corporation, the film division of Viacom Inc (VIA) ended 2011 with a whopping $5.17 billion worldwide box office collection and in the process nudged aside Time Warner Inc‘s (TWX) film division group Warner Bros.
Warner Bros., had topped the North American box office chart from 2007 to 2010. However, in 2011, Paramount Pictures with its stunning box office performance dislodged Warner Bros. from the top spot.
Paramount Pictures generated a record $1.96 billion from the North American market and the remaining $3.21 billion came from the international box office. Paramount Picture’s success in the year 2011 is primarily credited to the movie “Transformers: Dark of the Moon” that earned a massive $ 1.1 billion worldwide and was placed in the second position in terms of box-office collections. Warner Bros’.Harry Potter and the Deathly Hallows: Part II emerged as the top grossing film of 2011 with a staggering $1.25 billion box office collection.
Last year, Paramount released 16 movies globally, out of which six movies did extremely well at the box office.
U.S.box office generated $9.9 billion in revenues in 2011, of which Paramount holds a staggering 19.5% market share followed by Warner Bros. 18.2% and Sony Corporation‘s(SNE) film division Sony Pictures with 12.6% market share.
Presently, Paramount Pictures is targeting the emerging markets of Asia and South America in order to expand their movie business networks. In order to gain popularity in those emerging markets, the movie “Mission Impossible 4: Ghost Protocol” was released in those countries along with the U.S. Moreover, in 2011, the company teamed up with DreamWorks Animation SKG Inc. (DWA) to distribute animated movies.
Paramount Pictures boasts an impressive line up of movies for fiscal 2012. Movies like “G.I. Joe: Retaliation”, “The Dictator” and “Paranormal Activity 4” will further dominate the worldwide box office collections going forward.
We believe that Viacom is well positioned for long-term growth as it continues to benefit from its predominately cable networks-based business model, strong affiliate fee revenue growth, global brands, strong share repurchase plan, multi-platform content, and is one of the fastest growing traditional ad media.
However, stiff competition from other media companies like News Corp. (NWSA) and Time Warner Inc. along with slow economic recovery may act as headwinds for the stock going forward. We, thus, maintain our long-term Neutral recommendation for Viacom.
Currently, Viacom has a Zacks#3 Rank, implying a short-term Hold rating on the stock.
Based in New York, Viacom Inc. is a leading entertainment content company that operates primarily in the U.S. and Europe. The company offers many of its world’s best known entertainment brands through television, motion picture, Internet, mobile and video game platforms.
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