Hats off to Susquehanna Financial Group’s Vasily Karasyov for having the wit today to describe Viacom’s creaky financial performance in the last three months of 2011 as “A Quarter Of Paranormal Activity.” But from the look of the inconsistent reactions to this morning’s news, one might wonder whether the mysterious forces from Paramount’s horror film franchise also were stirring on Wall Street. Investor views seemed to gyrate through the day as Viacom shares initially fell 4.5% from yesterday’s close, then leaped to a 2.1% gain before closing at $46.69, down 0.6%. Analysts also were all over the lot about the company’s prospects this year. Karasyov lowered his ad growth forecast for the current quarter to 1% from 4% after Viacom reported that fiscal 1Q sales fell 3% — mostly due to the ongoing ratings problems at Nickelodeon. Credit Suisse’s Spencer Wang lowered his earnings per share estimate for this year by 2% to $4.28. But Janney Capital Markets’ Tony Wible was impressed by Viacom’s share repurchases and projections of rising pay TV fees, and raised his 2012 EPS forecast 1.2% to $4.16. Wells Fargo’s Marci Ryvicker held fast to her $4.27 prediction. Calling herself “not only surprised by the decline (in advertising) but disappointed,” she adds that “profitability has held up” putting Viacom “on track to hit its 20% target margin next fiscal year.”
UPDATE, 6:55 AM: CEO Philippe Dauman says that Paramount is starting to make business plans for 2013 and 2014 and “can accommodate having Dreamworks [Animation] titles in or out” after their distribution deal expires next year. He told analysts, in a conference call, that the companies have “a strong relationship” and that he’s ready to discuss a new deal whenever Dreamworks Animation CEO Jeffrey Katzenberg is ready. But he added that Paramount’s “development pipeline is strong” and will include more animated films following the success of its first effort, Rango.
Dauman also says that the company plans “a very significant increase” over the next year or 2 in the amount of original shows it will run on cable channel Spike. He added that he expects “significant year-over-year gains” in upfront ad sales across Viacom’s networks.
PREVIOUS, 5:11 AM: Helped by a strengthening ad market, TV hits including MTV’s Jersey Shore, and a Paramount Pictures slate that included Rango, Viacom far exceeded Wall Street analysts’ forecasts for its financial performance in the quarter that ended in March. The entertainment giant reported net earnings of $376 million, up 47% vs. the same period last year, on revenues of $3.3 billion, up 20%. That translated into 72 cents in earnings per share. The consensus forecast among analysts put earnings of 61 cents with revenues of $3 billion.
“This was an outstanding quarter, reflecting our continued operating momentum,” Viacom CEO Philippe Dauman said in a prepared statement.
NEW YORK, Jan. 13, 2011 — Viacom Inc. today announced that its Board of Directors has declared a quarterly cash dividend of $0.15 per share on its Class A and Class B common stock. The dividend will be payable on April 1, 2011 to stockholders of record at the