Viacom Misses on the Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

Viacom (Nasdaq: VIAB) reported earnings on friday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q3), Viacom missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share expanded.

Margins improved across the board.

Revenue details
Viacom reported revenue of $3.24 billion. The 28 analysts polled by S&P Capital IQ hoped for revenue of $3.49 billion on the same basis. GAAP reported sales were 14% lower than the prior-year quarter's $3.77 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.97. The 30 earnings estimates compiled by S&P Capital IQ averaged $1.01 per share. GAAP EPS of $1.01 for Q3 were 4.1% higher than the prior-year quarter's $0.97 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 50.7%, 230 basis points better than the prior-year quarter. Operating margin was 27.9%, 150 basis points better than the prior-year quarter. Net margin was 16.5%, 130 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.66 billion. On the bottom line, the average EPS estimate is $1.20.

Next year's average estimate for revenue is $14.41 billion. The average EPS estimate is $4.24.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 119 members rating the stock outperform and 11 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give Viacom a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Viacom is outperform, with an average price target of $55.67.

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