Viacom Blames Harmonix Dispute For Low Earnings
Spoiler alert: When you're slapped with a $383 million charge, it's going to drag down your net earnings.
Viacom's final quarter wasn't exactly the stellar money-maker that the company was probably hoping for. The company's net earnings were down by 65%, and probably not for the reasons you might expect (you know, like crazy high-stake poker games). Instead, Viacom is claiming that it's largely due to that ongoing legal battle with former Harmonix shareholders.
Viacom's released figures for Q1 2012 (which ended on December 31st, 2011) show that the company's net earnings were $212 million. That's $398 million less than last year's figure of $610 million. According to Chief Financial Officer James W Barge, a large part of this drop is thanks to the $383 million unpaid invoice that Viacom was slapped with back in December:
"I'd like to note that discontinued operations in the December quarter of this year reflects the $383 million charge related to the earn-out dispute with the former shareholders of Harmonix.
"In this regard, I would note that we have filed a lawsuit seeking to compel consideration of arguments and evidence that we believe were inappropriately excluded from the dispute resolution process."
Barge's argument that the only big difference between this and last year being the $383 million charge actually seems to make sense. Revenues for Q1 2012 were $3.952 billion (up from $3.828 billion during the same period a year earlier), and expenses stood at $2.185 million (again, up a bit from $2.017 billion).