Earnings Preview: Viacom

Viacom (VIA) is expected to report Q3 earnings after the close Monday with a conference call scheduled for 4:30 pm ET.

Guidance

Analysts are looking for a profit of 55c on revenue of $3.32B. The consensus range is 53c to 63c for EPS, and revenue of $3.03B to $3.91B, according to First Call. On October 10, the company forecast Q3 EPS 53c to 55c, explaining that results will be affected by a decline of approximately 2% in worldwide advertising revenues. At the same time, Viacom updated its FY08 business outlook, which it said reflects continuing difficult economic conditions. Viacom now expects to deliver EPS growth in the mid-single to low-double digits.

Analyst Views

Ahead of the Q3 results, Barrington downgraded Viacom B to Market Perform from Outperform. The firm believes advertising softness and currency exchange factors could bring down Q4 expectations.

The firm also points out that unlike CBS (CBS), Viacom does not have a dividend yield to support the stock. Chairman Sumner Redstone recently said that he is not selling more Viacom stock, hitting out against rumors he would sell a piece of the company as the credit crisis has hurt his cash position. According to the Silicon Alley Insider, there has been a lot of "chatter" at Viacom that layoffs are on the way due to the weak advertising environment.