Restructuring Drives Down Viacom5/11/2007 8:00 PM Eastern
Miller Tabak media analyst David Joyce maintained his “buy” rating and $45 per share price target on Viacom last week. He said despite an earnings shortfall due to restructuring charges at MTV Networks, the stock could be a buying opportunity.
Viacom reported first quarter earnings on May 10, with revenue up 16% to $2.75 billion. But because of the restructuring costs at MTV Networks — which laid off about 250 workers in February — and higher than expected costs at its Film and Entertainment unit, operating income was down 29% to $433 million.
Viacom's Media Networks unit reported a 20% decline in operating income largely because of $56 million in restructuring costs.
Net earnings for the period were down 36% to $203 million from $317 million, primarily due to the operating income declines.