Vi­a­com low­ers earn­ings guid­ance for first time since 2008

Pakistan Observer - - ECONOMY WATCH -

NEW YORK—Em­bat­tled me­dia gi­ant Vi­a­com Inc (VIAB.O) on Fri­day said its third-quar­ter earn­ings will fall short of Wall Street es­ti­mates, mark­ing the first time since Oc­to­ber 2008 that it has put out such guid­ance. The me­dia com­pany also said that it ex­pects do­mes­tic ad sales to de­cline about 4 per­cent in the third quar­ter end­ing June 30, an im­prove­ment from last quar­ter’s de­cline of 5 per­cent. The New York-based me­dia com­pany, which owns Para­mount, Com­edy Cen­tral and Nick­elodeon, cited weak per­for­mance from its lat­est Teenage Mutant Ninja Tur­tle movie and a de­lay in com­plet­ing an agree­ment with an un­named stream­ing video provider. It blamed the lat­ter on “the re­cent and highly pub­lic gov­er­nance con­tro­versy.”

Vi­a­com Chief Ex­ec­u­tive Philippe Dau­man and con­trol­ling share­holder 93-year-old Sum­ner Red­stone are en­gaged in a fierce fight over con­trol of the com­pany that is play­ing out in court­rooms in Delaware, Mas­sachusetts and Cal­i­for­nia. On Thurs­day, Red­stone moved to re­move five of Vi­a­com Inc’s VIAB.O di­rec­tors, in­clud­ing CEO Dau­man, from the board of the me­dia com­pany, a big step to­ward a po­ten­tial man­age­ment shakeup of the al­most $20 bil­lion com­pany.

Red­stone said last month he was con­sid­er­ing re­mov­ing Dau­man and the board, cit­ing dis­sat­is­fac­tion with the strug­gling com­pany’s strat­egy that in­cludes a sale of a mi­nor­ity stake in Para­mount Pic­tures. The com­pany has been work­ing to re­verse de­clines in TV rat­ings at many of its net­works. Wall Street cheered the shakeup. In a note to clients on Fri­day, an­a­lysts at Credit Suisse said any changes the com­pany will make to its strat­egy would bring “fur­ther val­u­a­tion up­side for Vi­a­com share­hold­ers.”

Shares of Vi­a­com rose 0.7 per­cent in mid­day New York Stock Ex­change trad­ing. Vi­a­com share­hold­ers are foot­ing the bill for some of the spat’s le­gal costs, ac­cord­ing to a reg­u­la­tory fil­ing. Dau­man and board mem­ber Ge­orge Abrams en­tered into an in­dem­ni­fi­ca­tion agree­ment on Mon­day that was ap­proved by a com­mit­tee of in­de­pen­dent di­rec­tors on the board, the com­pany said in a fil­ing with the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion on Fri­day.—Agen­cies

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