Earnings Preview: Viacom

Viacom (VIA) is expected to report Q2 earnings after market close Tuesday, July 29, with a conference call scheduled for 4:30 p.m. ET.

Guidance

Analysts are looking for a profit of 58c on revenue of $3.52B. The consensus range is 55c to 61c for EPS, and revenue of $3.3B to $3.69B, according to First Call. In May, Viacom forecast EPS growth between 2008 and 2010 in the low double digits and CEO Philippe Dauman commented that Q2 advertising growth is slowing. That advertising growth is slowing may not come as a blow to the company, which is looking to build other revenue streams including moving into the casual games business. Viacom and Dauman, who called Nickelodeon "the ultimate mini-revenue brand we have," said that in addition to content targeting "youngsters," Viacom also has the games, a virtual world and will host the first Nickelodeon cruise.

Analyst Views

A Gabelli analyst thinks that concerns about an advertising slowdown and margin compression for cable companies are valid, but exaggerated. The firm believes that Viacom still has diverse and mostly recurring revenue streams, as well as high free cash flow and increasing ad revenue.