This story was written by David Kaplan.
It looks to be a brutal Q3: Both Viacom (NYSE: VIA) and CBS Corp (NYSE: CBS). have cut their respective outlook, warning investors that they have been taking a hit on the ad slowdown and the wider economic pain touching all businesses right now.
-- Reuters: Viacom's Q3 earnings will come in at least 10 percent short of Wall Street estimates. The company pinned the decline on the worsening ad revenue picture. That news quickly shot Viacom's stock down 20 percent. Viacom Chief Executive Officer Philippe Dauman issued a statement saying the media giant, which owns MTV Networks and Paramount, was "moderating our near-term targets" in light of the dismal economy. In its Q2 earnings report, Viacom pointed to both retail and automotives categories as the reason for lower than expected revenues at its cable TV properties. While they held back on strong prediction for Q3, it's clear they couldn't foresee how bad things have gotten. Neither have financial analysts, who keep revising their forecasts downward.
-- Marketwatch: CBS also attributed the current troubles to tightening ad budgets, saying it was lowering its outlook for the year and taking a $14 billion charge. That announcement send CBS shares down 14 percent. CBS said it now expects its third-quarter earnings excluding special items to be between 42 and 44 cents a share, compared to 51 cents a share in Q307.
By David Kaplan