Soft Market: Viacom Forecasts Slower 2Q Ad Biz
Viacom is forecasting its advertising business to move up 3% to 4% in the second quarter versus the second quarter in 2007. Just a few weeks ago, Viacom had estimated a 7% growth rate in the second quarter, which was similar to the first quarter's 7% rise.
In speaking at the Bernstein Strategic Decisions Conference, Dauman said the business was in an "economically uncertain environment." Viacom's Dauman said specific categories, such as automotive advertising, were at the root of some of the weakness--and mostly from short-term scatter advertising sales.
Dauman, however, was upbeat about the long term, especially coming out of the TV industry's annual upfront presentations. He said for Viacom's cable networks, such as MTV Networks, the advertising business had a "good momentum."
Media analysts are less worried about Viacom than other media companies, because of its lesser exposure to ad sales, in part because of subscriber fees paid by cable operators for its networks.
Viacom stock sank almost 5% on the news to $36.49.