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Viacom Showing Some Signs of Turning the Corner

Well, that wasn't so bad.

After months, years, nearly a lost decade, Viacom Inc. (VIAB) on Thursday, Aug. 3, showed signs of improving fundamentals as the pace of an advertising sales decline slowed in the second quarter of 2017 and Paramount Pictures reported its first quarter of positive operating income in nearly two years.

Viacom posted earnings per share of $1.17 for its fiscal third quarter, ended June 30, beating the consensus estimate of $1.05 per share. Revenue also surpassed projections, as sales totaled $3.36 billion, compared with an average forecast of $3.32 billion, according to a Bloomberg survey of 27 analysts who cover the stock.

Shares of Viacom were mixed in after-hours trading, gaining as much as 3.8% or dropping 1.9% after closing on Thursday at $35.07, up 2.8%. The roller-coaster stock dropped 4.1% on Wednesday.

With an industry-wide decline in pay-TV subscribers, Viacom not surprisingly reported that ad sales at its cable TV networks fell 2% in its fiscal third quarter, compared with a decline of 4% during the quarter ended March 30. For the current quarter, Viacom finance chief Wade Davis said advertising sales declines would be similar to results for the June quarter.

Critical to stabilizing the decline in ad-sales, Davis said, is expectations that advertising revenue...


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