Viacom expects weak 3Q but chance of CEO change buoys shares

NEW YORK, N.Y. – Viacom projected poor results for its quarter ending this month, but investors clamoured for shares nonetheless Friday following company moves that pushed CEO Philippe Dauman closer to the exit.

The company said Friday that expects earnings of $1 to $1.05 per share, below the $1.38 per share forecast by analysts, according to a poll by S&P Capital IQ. It’s blaming the weak performance of the movie “Teenage Mutant Ninja Turtles: Out of the Shadows” as well as a delay in closing a streaming video deal.

Viacom says the “recent and highly public governance controversy” impaired its ability to cut a good deal.

It also forecast revenue from domestic advertising will drop 4 per cent.

The earnings preview came a day after Sumner Redstone’s National Amusements, Viacom’s controlling shareholder, moved to oust Dauman and four other directors from the board of the New York company. The manoeuvr was immediately challenged in a Delaware court by Viacom’s lead independent director, Frederic Salerno.

Shares rose nearly 1 per cent to $45.42 Friday, despite a broad U.S. market sell-off, following a 7 per cent gain Thursday.