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Tickers in this Article: VIAB
Viacom (Nasdaq:VIAB) will announce its third quarter earnings on Friday, August 3, 2012.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Surprising Earnings Results

What to Expect: The consensus estimate for Viacom's earnings is $1 per share, up 1% from a year ago when the company reported earnings of 99 cents per share.

Whereas the consensus estimate was $1.12 three months ago, it has since fallen. For the fiscal year, analysts are expecting earnings of $4.28 per share.

Viacom's expected revenue of $3.49 billion for the quarter is below last year's reported figure of $3.77 billion by 7.3%. For the fiscal year, expected revenue is $14.51 billion.

Company Performance: Revenue for Viacom has been on the rise for four consecutive quarters. It increased 2% to $3.33 billion in the second quarter. Prior to that, the figure rose 3.2% in the first quarter, 24.7% in the fourth quarter of the last fiscal year and 14.1% in the third quarter of the last fiscal year.

The company's earnings have been rising for the last eight quarters, and for the last four, net income has increased year-over-year by an average of 57.9%.

VIAB's P/E ratio of 13.7 is above the industry average of 12.66. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio

Since May 2, 2012, the stock price has fallen 1.5% to $46.70 from $47.43. The stock saw one of its worst stretches when its price fell $3.12 per share between May 29, 2012 and June 4, 2012.

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