Viacom Warns On Q4 Profit, Cuts Dividend; Interim CEO Dooley To Depart

(RTTNews) - Viacom Inc. (VIA, VIAB) on Wednesday forecast earnings for the fourth quarter below analysts' estimates and said it will reduce its dividend by half to preserve capital. The media conglomerate will move to access debt capital markets in the near term to improve its liquidity as well as financial flexibility.

Further, the company said that Tom Dooley, Interim President and Chief Executive Officer, has informed the board of his decision to depart the company. He has agreed to remain in that position through November 15, 2016 to facilitate an orderly transition.

Viacom has also ended the process of seeking a minority investor in Paramount Pictures movie studio at this time, in order to consider all options available to the company.

For the fourth quarter, Viacom forecast adjusted earnings in a range of $0.65 to $0.70 per share, to reflect a programming impairment charge of $115 million in its filmed entertainment segment related to the expected performance of an unreleased film.

The company expects fourth-quarter reported earnings of $0.55 to $0.60 per share, primarily reflecting severance expenses incurred as a result of the settlement agreement.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.89 per share for the quarter. Analysts estimates typically exclude special items.

Viacom will reduce its quarterly dividend to $0.20 per share from the prior $0.40 per share. Accordingly, the company's board declared a quarterly cash dividend of $0.20 per share on both its Class A and Class B common stock.

The dividend will be payable on October 3, 2016 to stockholders of record at the close of business on September 22, 2016.

In mid-August, Viacom announced an agreement with National Amusements Inc. or NAI, members of the Redstone family and related parties, settling all disputes among them.

Under the terms of the settlement, Philippe Dauman resigned immediately as President and CEO. Controlling shareholder Sumner Redstone and his daughter Shari Redstone regained full control of Viacom.

Viacom will provide additional information regarding its fourth quarter and full-year results as well as its business outlook during its regular quarterly earnings call.

VIAB is trading at $36.00, down $0.16 or 0.44 percent on a volume of 1.48 million shares.