Viacom is crashing

Viacom shares are getting smoked on Tuesday, down as much as 14% in morning trading after the company reported earnings results.

The earnings Tuesday also came with quite a strong defence of the company from CEO Philippe Dauman, who responded to critics.

During the earnings call, he said in part,

“Our outlook and the facts have been distorted and obscured by the naysayers, self-interest critics and publicity seekers. You will not be distracted or deterred as we build for the bright future ahead of us.”

It’s sort of a repeat of what Disney CEO Bob Iger did last August, when he opened the company’s earnings call with a lengthy defence of ESPN. Concern had been mounting that declining cable subscriptions would harm the sports network.

Right now, people are saying similar things about Viacom, which reported a 3% decline in revenue from its media networks for the first fiscal quarter.

The owner of TV channels including Comedy Central and Nickelodeon reported a 6% drop in revenues to $3.15 billion, while adjusted earnings per share came in at $1.13.

Sales in the filmed entertainment division also fell by 15%, as the company put out fewer releases, according to Reuters.

“2015 was a challenging year operationally as we redesigned ourselves and adapted to significant industry disruption,” Phillipe said in the earnings statement. “Our first fiscal quarter of 2016 reflected these challenges.”

Investors have not been particularly bullish on the company and its leadership. Last week, Sumner Redstone stepped down as executive chairman and was replaced by Dauman, after pressure from Investment adviser SpringOwl and Redstone’s daughter Shari.

Dauman is one of seven trustees, including Shari and her son, that will take over nearly 80% of the voting stakes at CBS and Viacom after Redstone dies.

This chart shows the drop in the stock Tuesday. It has fallen about 47% over the last 12 months.

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