Spending Forecasts Keep Falling on Wall Street

Analyst sees third-quarter ad revenue declines for Time Warner, Viacom
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Weakness in ad sales in the third quarter continues to reverberate on Wall Street, where another analyst has reduced revenue forecasts and cut target prices for media stocks.

Vijay Jayant of International Strategy & Investment Group says he expects television to post 5.9% growth in 2014, down from earlier expectations of a 7.5% growth rate. He forecasts that cable will post a 4.5% increase while broadcast will be flat.

Jayant also predicts 0.6% growth in ad revenues in 2015 (3.1% if you take political and Olympic spending out of the equation), down from his prior 1.5% estimate, with cable plus 5% and broadcast down 2.5%.

In the short-term, the third-quarter domestic ad revenue numbers will be tinged with red for several of the major media companies.

Jayant expects the Fox broadcast network to be down 3.4% and its stations to be down 1.5%. He also sees CBS' stations down 1.1% despite political ad spending.

On the cable side, Jayant expects AMC Networks to be down 10.1%, Time Warner to be down 2.1% and Viacom to be down 3%.

Big gainers in the quarter include Fox's cable networks, up 17.8%, Comcast's Telemundo, up 10.2% and Walt Disney's cable networks up 8.5%.

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