) is slated to release its fourth-quarter fiscal 2012 results on
Thursday, November 15, before the opening bell. The Zacks
Consensus Estimate for the quarter is pegged at $1.17,
representing an annualized growth of 10.57%.
With respect to earnings surprises, Viacom has outperformed
the Zacks Consensus Estimate in three of the last four quarters
with an average beat of 2.69%.
Third Quarter Recap
On August 8, Viacom reported its third-quarter fiscal 2012
financial results. Quarterly GAAP net income was approximately
$523 million or 99 cents per share compared with a net income of
$574 million or 97 cents per share in the prior-year quarter.
Adjusted earnings per share (excluding special items) of 97 cents
in the reported quarter were below the Zacks Consensus Estimate
Quarterly net revenue slid 14% year over year to $3,241
million and also well below the Zacks Consensus Estimate of
$3,511 million. Quarterly operating income was $903 million, down
8% year over year.
Agreement of Estimate Revisions
In the last 30 days, out of the total 24 estimates, two
estimates went up while five moved south for the fourth quarter
of fiscal 2012. For the first quarter of fiscal 2013, out of the
18 estimates, no upward revision was witnessed, while four moved
downward over the same timeframe.
For fiscal 2012, in the last 30 days, out of the 27 estimates,
there was a single upward revision while six downward revisions
were witnessed. Likewise, for fiscal 2013, out of the 27
estimates, one estimate was revised upward, while seven moved in
the opposite direction over the same time period.
Magnitude of Estimate Revisions
Over the last 30 days, the current Zacks Consensus Estimate
deteriorated by a penny for the fourth quarter of fiscal 2012
while it decreased by 5 cents for the first quarter of fiscal
2013. The current Zacks Consensus Estimate remained unchanged at
$4.18 for fiscal 2012 over the last 30 days, while the estimate
decreased by 3 cents to $4.76 for fiscal 2013 over the same time
We believe that Viacom is well positioned for long-term growth
as it continues to benefit from its predominately cable
networks-based business model, strong affiliate fee revenue
growth, strong share repurchase plan, multi-platform content, and
is one of the fastest growing traditional ad media.
However, stiff competition from other media companies like
Time Warner Inc.
) along with flop movie releases and mounting debt may act as
headwinds for the stock, going forward.
We maintain our long-term Neutral recommendation on Viacom
Inc. Currently, the company retains a Zacks #3 Rank, implying a
short-term Hold rating.
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