Viacom (VIAB) Stock Down Ahead of Earnings Results
NEW YORK (TheStreet) --Shares of Viacom (VIAB) - Get Report are lower by 0.45% to $48.18 in mid-morning trading on Wednesday, one day prior to the release of the entertainment company's 2015 fourth quarter earnings results.
The company will announce its latest financial results before the market open on Thursday.
Analysts are expecting Viacom to post a year over year decline in both earnings per share and revenue for the most recent quarter.
The company has been forecast by analysts surveyed by Thomson Reuters to report earnings of $1.55 per share on revenue of $3.88 billion for the three month period ended in September.
Viacom's adjusted earnings came in at $1.71 per diluted share on revenue of $3.99 billion for the 2014 fourth quarter.
Viacom is a New York City-based company that creates TV programs, movies, short form videos, applications, games, consumer products as well as social media and other entertainment products.
Separately, TheStreet Ratings team rates VIACOM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate VIACOM INC (VIAB) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VIACOM INC has improved earnings per share by 5.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VIACOM INC increased its bottom line by earning $5.45 versus $4.90 in the prior year. This year, the market expects an improvement in earnings ($10.92 versus $5.45).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, VIACOM INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- VIAB, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 10.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Although VIAB's debt-to-equity ratio of 4.56 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, VIAB maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has decreased to $400.00 million or 27.27% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: VIAB
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.