This Analyst Isn't Impressed With Viacom's Beat

Although Viacom, Inc. VIAB reported a FQ3 beat, expectations has been lowered by 30 percent after the company’s quarterly update, Wells Fargo’s Marci Ryvicker said in a report. He maintained an Underperform rating on the company, while lowering the valuation range from $38-$40 to $34-$36.

Viacom reported its quarterly EPS at $1.05, beating the Street estimate by $0.03. Analyst Marci Ryvicker pointed out, however, that the FQ3 operating income and EPS estimates had been lowered by 30 percent, from $997 million to $721 million and from $1.42 to $1.01, respectively. He commented that the beat was marginal after such a large downgrade in expectations.

No Turnaround In Sight

“And unfortunately, there's no visibility in trends to give us comfort that things are turning around any time soon - even with a new mgmt. team. WE DON'T THINK VIAB IS A QUICK OR EASY FIX NO MATTER WHO RUNS IT,” Ryvicker wrote.

The revenue, OI and EPS estimates for FY16 have been reduced from $12.740 billion to $12.557 billion, from $3.050 billion to $2.874 billion and from $4.25 to $3.91, respectively. The revenue, OI and EPS estimates for FY17 have been reduced from $12.929 billion to $12.611 billion, from $3.101 billion to $3.043 billion and from $4.40 to $4.20, respectively.

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