Earnings Preview: Viacom

Apr.29.09 | About: Viacom Inc. (VIA)

Viacom (NASDAQ:VIA) is expected to report Q1 earnings before the market open on Thursday, April 30, with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for a profit of 26c on revenue of $2.97B. The consensus range is 20c-38c for EPS, and revenue of $2.77B-$3.27B, according to First Call. Analysts believe the company, which is struggling with higher programming expenses, weak performance ad its film studio and weak ratings at its TV networks, believe Viacom may report figures that indicate negative year-over-year growth. Analysts and investors will listen for comments on its upcoming Star Trek movie, as many believe it could be a hit and provide a boost to earnings for both Viacom and its Paramount unit. Investors will also put focus on advertising trends, particularly the outlook for Q2 on hopes that declines in advertising will not get worse.

Analyst Views

Analysts expect sales of the Rock Band video game to decline 25% in the quarter on decreased consumer spending. In an April 20 note to clients, Pali Research analyst Richard Greenfield said that although the shares have rebounded in the recent market rally, he has lost confidence that its management can close the valuation gap "particularly given a pattern of poor decision-making." Additionally, Greenfield says Viacom is wasting its time in a lawsuit against Google (NASDAQ:GOOG), and should instead be working with Google (GOOG) to figure out how they can make more money online from Viacom's content and programming.