Viacom reduced its 2008 full-year guidance Friday to reflect the continuing economic conditions, adding that it expects domestic ad revenue to decline in the third quarter by as much as 3%.
In a statement issued Friday, Viacom said that it expects to report adjusted diluted earnings per share growth in the mid-single to low-double digit range for the full year. It previously had predicted low-double digit earnings growth for the year.
In the third quarter, the media giant said it anticipates earnings to be between 53 cents and 55 cents.
The change comes after a disappointing second quarter—domestic ad growth was up just 1% in the period—missing the company’s previous estimate of 3% growth.
In the statement Viacom said that the third quarter results will be impacted by a 2% decline in worldwide advertising revenue, adding that the decline reflects a decrease of about 3% in domestic ad revenue and an 8% increase international ad sales.
“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,” CEO Philippe Dauman said in a statement. “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.”
“Viacom is fundamentally strong with powerful brands and leadership positions in attractive and growing media segments around the world,” he added. ‘We have a strong balance sheet and we continue to generate significant cash flow, which are important attributes in this time of economic uncertainty.”
Viacom shares, down more than 50% so far this year, were hammered in midday trading Friday. The stock dropped 13.4% ($2.78 per share) to $17.90 each in afternoon trading Oct. 10, in what has been an extremely volatile market.
Viacom is scheduled to report third quarter results on Nov. 3.