Don’t raise Todd Juenger’s name if you happen to run in to Viacom CEO Philippe Dauman this morning. The Bernstein Research analyst — who’s also Wall Street’s most vigorous Viacom critic — just unloaded both barrels at the spreading view that the company is poised for a rebound. Shares are +9.6% since New Year’s Day, closing at $57.82 yesterday: As I noted this week, several investors and analysts say that ratings either have or should improve at Nickelodeon and MTV, and will start to look really good when compared to early 2012 when Nick hit the skids. Don’t tell that to Juenger, who just reiterated his “underperform” rating and $52 price target. “We attribute Viacom’s poor ratings primarily to a lack of institutional creative capability, perennial under-investment, excessive reliance on too few hit programs, and liberal online distribution” to companies such as Netflix — which cannibalizes TV viewing — he says. As a result, he places a “low probability on the likelihood of a ratings turnaround.”
Add Wells Fargo Securities’ Marci Ryvicker to the list of analysts who believe that Viacom shares have hit bottom after a year of dreary results — especially at its two flagship channels, Nickelodeon and MTV. Ryvicker upgraded Viacom this morning to “outperform” from “market perform” although she didn’t change her financial targets. The stock just recently recovered from the drubbing it took last September as it became clear that Viacom had big ratings problems. The target demo audience for Nickelodeon is -25.7% since then, while at MTV it’s -9.3%. But in about six weeks, comparisons with last year’s ratings and ad sales will “start to ease,” Ryvicker says. That’s “likely to be a catalyst for the stock, particularly as [Viacom] heads right into its financially significant period known as the ‘Hard 8′” — the eight weeks before the holiday shopping season when Nickelodeon makes most of its ad sales. She also believes that in the recent upfront ad sales season, Viacom made “conservative audience guarantees, which means fewer makegoods and better monetization in the upcoming scatter market.” On top of that, she’s encouraged about the new contract terms with DirecTV. Ryvicker expects to see a turnaround at Paramount with upcoming films including G.I. Joe: Retaliation, Star Trek 2, and World War Z. She adds, though, that the studio only accounts for 8% of Viacom’s operating income so it is “unlikely to materially move the needle.” Viacom shares are up …
That’s emerged as one of the day’s most talked about questions in media business circles — and it’s an unexpected one after Viacom’s worse-than-expected earnings report Friday morning for the quarter that ended in June. Oddly enough, investors responded by driving Viacom shares +5.6% over the last two trading days, well ahead of the overall market. What’s going on? Analysts who are bullish on the stock say it’s time to jump on a bargain. Viacom’s been beaten up in the year since it began to report plummeting ratings at some of its most important channels including Nickelodeon and MTV. It trades for about 9.6 times its estimated earnings per share for next year — lower than peers including Comcast (15.7 times), Disney (14.3 times), News Corp (13.8 times), CBS (12.3 times), and Time Warner (11.3 times). But CEO Philippe Dauman encouraged analysts on Friday to believe that a turn-around is near. Lazard Capital Markets’ Barton Crockett says he’s “more optimistic about a company whose recent ratings challenges earn it standing as this year’s ’Dog of the Dial’.”
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.”
NEW YORK, Nov. 11, 2011 — Viacom Inc. (NYSE: VIA, VIA.B) today announced the transfer of its stock exchange listing to The NASDAQ Global Select Market from The New York Stock Exchange. The company said that the voluntary transfer to The NASDAQ Global Select Market, an exchange of The NASDAQ OMX Group Inc. (Nasdaq: NDAQ), will be more cost effective, while continuing to provide Viacom shareholders with strong execution and liquidity. Viacom’s Class A common stock will trade on NASDAQ under the symbol “VIA” and its Class B common stock will trade under the symbol “VIAB” beginning December 1, 2011.
Here’s why: Media stocks are up 24.4% over the last six months, outperforming the benchmark Standard & Poor’s 500, which rose 15.1% over the period. So they already reflect a lot of optimism. But investors may be disappointed by upcoming news about ad sales, ratings, and ticket sales, Nomura Securities analyst Michael Nathanson says in a report out this morning. His warning comes as media executives prepare to release their quarterly earnings and talk to Wall Street about the state of the business. They conduct hour-long infomercials designed to persuade the world that everything is fine — or, if it manifestly isn’t, that it’s someone else’s fault.
But Nathanson says the companies’ go-go projections about over-the-top ad sales miss how much Japanese auto makers are cutting production as they grapple with parts shortages following the country’s earthquake and tsunami. For example, Toyota will crank out 35,000 fewer cars than planned in North America in March and April. That’s a big deal: Auto companies typically spend about $1,200 on ads for each car they sell. Meanwhile, overall broadcast and cable network ratings stank in the first quarter. The Big Four networks’ live ratings were down 15.9% vs. the same period last year. As for movies, if you don’t know about this year’s miserable ticket sales, then you aren’t paying attention — although Nathanson says that box office would have been up 11% if last year didn’t include Fox’s Avatar and Disney’s Alice In Wonderland.
NEW YORK, July 27 /PRNewswire-FirstCall/ — Viacom Inc. today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.15 per share on its Class A and Class B common stock. The dividend will be payable on October 1, 2010 to stockholders of record at the close of business on August 31, 2010.