As its executive chairman and CEO Philippe Dauman apparently fights for his business life, Viacom said it expects fiscal third quarter domestic ad sales to decline about 4%.
Dauman was the target of a palace coup yesterday by Viacom's largest shareholder Sumner Redstone, who moved to oust the CEO and four other members of the Viacom board of directors. Although Dauman and the Viacom board have sued to block Redstone's latest move, analysts believe it is only a matter of time before Redstone initiates a major management shakeup.
In a press release Friday, Viacom said it expects to report adjusted earnings of between $1 and $1.05 per share for the quarter ended June 30. Performance will be negatively impacted by the poor box office showing of the latest installment in the Teenage Mutant Ninja Turtle franchise, but the company said it has a strong future slate for Paramount Pictures. Viacom had said it hoped to conclude plans to see a 49% stake in Paramount by the end of the month, but Dauman has since said that deadline will be delayed due to recent events.
Also impacting fiscal Q3 results is a delay in completing a "significant SVOD agreement, but the recent and highly public governance controversy negatively impacted the timing and its ability to achieve an optimal outcome with partners."
The 4% slide in domestic ad sales comes as the company said it has substantially completed what it called a "very successful annual advertising upfront sales process."
Viacom will provide additional information regarding its third quarter results and business outlook during its regular quarterly conference call on August 4, 2016, following the release of its earnings announcement.
