This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Viacom Vibe Turns Upbeat

Investors are ready to reset their clocks when it comes to Viacom (VIA - Get Report).

The media conglomerate, in what is likely to be its last earnings report as a joint company, reports Tuesday as its separation proceedings move toward a long-awaited conclusion. Wall Street is eager to see the split completed so the company can have the semblance of a fresh start.

The company said earlier this year it would be splitting into the new Viacom, a growth play to be led by Tom Freston, and the new CBS, a value play led by Leslie Moonves. Last week it announced that the split, which will give Viacom holders half a share of each new company, was ahead of schedule and on track for a pre-Christmas separation. To no one's surprise, Chairman Sumner Redstone -- who cited irreconcilable differences on the synergy front for the disassembly play -- will keep his hands firmly on the wheel as chairman at both companies.

Redstone's Moses-like plan for the parting, intended as a way to clarify the investment thesis for Wall Street, hasn't done much to help the stock. Along with rivals like Time Warner (TWX - Get Report) and News Corp. (NWS - Get Report), Viacom's stock has been spinning its wheels for some time. Viacom has fallen from an August high of near $36 to its recent level just below $31.

That said, the company's units continue to perform well. Analysts will be looking for earnings of 45 cents per share on $5.81 billion in revenue for the third quarter.

Most analysts agree that the pending split should yield hidden treasure. "We continue to recommend Viacom as we believe the split of the company will unlock value in the shares," says Prudential's Katherine Styponias. Prudential rates Viacom overweight with a $45 price target.

At CBS, the ratings picture couldn't be much better. While Disney's (DIS - Get Report) ABC has Desperate Housewives and Lost, CBS remains the No. 1 network in prime-time households and total viewers, according to Nielsen Media Research. Year to date, it trails ABC by just 0.2 of a ratings point in the all-powerful 18-49 demographic bracket.

At its radio and outdoor units, Prudential sees more modest single-digit growth of 1% and 3%, respectively.

Time for Change?
Viacom's long slumber

On the cable side, Styponias says, "Viacom's portfolio of cable networks should continue to post double-digit revenue increases in the quarter." She forecasts cable revenue of $1.61 billion, up 12% year over year.

Paramount has had a resurgent summer at the box office, thanks to films like War of the Worlds and The Longest Yard. Styponias says Prudential projects entertainment revenue of $660 million, up 20%, along with a doubling in year-over-year DVD revenue. New President Gail Berman hopes to keep that ball rolling at the division.

According to sources, the company is also still planning on offloading its Simon & Schuster publishing division and its Paramount Theme Parks.

On Friday, shares of Viacom closed down 10 cents to $30.82.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
VIA.B $0.00 0.00%
DIS $105.03 -0.51%
NWS $16.66 0.21%
TWX $83.26 0.22%
VIA $70.50 -0.98%

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs