Viacom has adjusted its full-year earnings projections to reflect the uncertainty of the financial markets and the certainty that advertising revenues will be depressed. Viacom CEO Philippe Dauman also said it would seek "efficiencies" to deal with the economic downturn.
Viacom had not put out guidance on the third quarter (which ended Sept. 30), but had talked about low double-digit earnings gains for the full-year as part of a three-year projection.
Viacom issued the advisory after Chairman Sumner Redstone announced he would be selling some stock to pay down debt, said a company spokeswoman. "We have to provide complete financial transparency before a major shareholder can buy or sell anything," said Viacom spokeswoman Kelly McAndrew.
Viacom has now updated that 2008 earnings growth to mid single digits to low double digits, a wide range that takes into account the uncertainty of a market that fell off a cliff starting the last week of September.
The company still plans to return $.53-$.55 per share in the third quarter.
Viacom said Friday it is expecting a 2% ad decline worldwide and a 3% drop domestically.
“Given the rapid softening of the economy and the uncertainty this creates in forecasting advertising growth, we are taking the prudent step of moderating our near-term targets," said Dauman in a statement announcing the revised projections. But he also said the company would make whatever adjustments to the business were necessary. "At the same time, we are moving quickly to adapt to the changing environment and will take appropriate steps to secure new efficiencies that will enhance our long-term earnings growth prospects."