Q3 Preview: Viacom (VIA) Hopes Increased Ad Revs Will Bolster Earnings
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Viacom (NYSE: VIA)(NYSE: VIA/B) is trading marginally lower ahead of the company's third quarter earnings report, expected out before the market opens on Thursday, October 11. Shares are down 0.11% in afternoon trading.
Viacom is expected to produce an EPS of or better than $0.69 with revs of $3.30 billion. Last quarter, the company had an EPS of $0.68 on revs of $3.3 billion, mixed to the consensus EPS of $0.66 and revs of $3.43 billion. In Q309, the company had an EPS of $0.55 with revs of $3.41 billion, EPS being in-line with views and revs beating.
VIA shares gained 13.6% through the quarter to $40.09 at the end of September. The stock is currently 7.3% better than the end of the quarter, and up 36% on the year.
A simple valuation puts shares trading for a forward P/E of 13.4x FY11 EPS estimates, compared to 15.5x for Disney (NYSE: DIS), 11.4x for News Corp. (Nasdaq: NWSA), and 12.2x for Time Warner (NYSE: TWX).
Data from Bloomberg shows that 7 analysts have a Buy rating on the shares, 3 have a Hold, and none recommend to Sell the stock. The analysts price target average is $44.50, with a high of $45 and a low of $22.
Analysts Through the Quarter
In August, Davenport downgraded the shares from Buy to Neutral.
September saw Credit Suisse lower their price target from $37 to $35, maintaining a Neutral rating.
UBS started VIA at Buy in September, with a price target of $40.
Summary
Deutsche Bank says that the key here is accelerating advertising growth. Talks have been "rampant" regarding how fast domestic revenue growth will be, of which Deutsche is forecasting 5.7% for Q310 and 6.6% in Q410. DB notes that investor expectations are a little north of their estimates. EPIX reporting lags one quarter, making Netflix (Nasdaq: NFLX) revs starting in the March quarter. They reaffirm their Buy rating, and Top Pick.
Wedbush is looking for an EPS of $0.69 on revs of $3.29 billion. They "assume growth acceleration at Networks on improving ad market trends and monetization of improving ratings, offset by higher opex on new program launches, and a swing to solid
profit at Filmed Entertainment."
Viacom is expected to release their Q310 earnings on Thursday, November 11, 2010, at approximately 7:00am EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
Viacom is expected to produce an EPS of or better than $0.69 with revs of $3.30 billion. Last quarter, the company had an EPS of $0.68 on revs of $3.3 billion, mixed to the consensus EPS of $0.66 and revs of $3.43 billion. In Q309, the company had an EPS of $0.55 with revs of $3.41 billion, EPS being in-line with views and revs beating.
VIA shares gained 13.6% through the quarter to $40.09 at the end of September. The stock is currently 7.3% better than the end of the quarter, and up 36% on the year.
A simple valuation puts shares trading for a forward P/E of 13.4x FY11 EPS estimates, compared to 15.5x for Disney (NYSE: DIS), 11.4x for News Corp. (Nasdaq: NWSA), and 12.2x for Time Warner (NYSE: TWX).
Data from Bloomberg shows that 7 analysts have a Buy rating on the shares, 3 have a Hold, and none recommend to Sell the stock. The analysts price target average is $44.50, with a high of $45 and a low of $22.
Analysts Through the Quarter
In August, Davenport downgraded the shares from Buy to Neutral.
September saw Credit Suisse lower their price target from $37 to $35, maintaining a Neutral rating.
UBS started VIA at Buy in September, with a price target of $40.
Summary
Deutsche Bank says that the key here is accelerating advertising growth. Talks have been "rampant" regarding how fast domestic revenue growth will be, of which Deutsche is forecasting 5.7% for Q310 and 6.6% in Q410. DB notes that investor expectations are a little north of their estimates. EPIX reporting lags one quarter, making Netflix (Nasdaq: NFLX) revs starting in the March quarter. They reaffirm their Buy rating, and Top Pick.
Wedbush is looking for an EPS of $0.69 on revs of $3.29 billion. They "assume growth acceleration at Networks on improving ad market trends and monetization of improving ratings, offset by higher opex on new program launches, and a swing to solid
profit at Filmed Entertainment."
Viacom is expected to release their Q310 earnings on Thursday, November 11, 2010, at approximately 7:00am EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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