Viacom shares dip

Analyst note hurts conglom; AOL TW slides

As Wall Streeters continue to evaluate the depth and speed of an economic upturn, Morgan Stanley Dean Witter analyst Richard Bilotti on Tuesday cut his earnings estimates for Viacom, sending the shares down 3.86% to $47.60.

Meanwhile, shares of AOL Time Warner fell 3.55% to $23.35 on negative news about the conglom’s gloomy earnings outlook, cash crunch and jitters over the company losing cable subs if a partnership with Advance/Newhouse dissolves.

Investors are irate at the stock’s sharp decline over the past year. John Malone, whose Liberty Media owns 4% of AOL Time Warner, appears to be angling for a seat on the board.

In a note to clients on Viacom, Bilotti said its Infinity radio and outdoor advertising properties haven’t recovered as fast as initially anticipated, so he trimmed his-first quarter earnings estimates. The note hit shares of other radio groups as well, including Emmis, Clear Channel and Cox.

Ad uplift

With economic indicators turning positive, the outlook has brightened for the ad market and for media companies whose livelihood depends on advertising. Broadcasters, particularly radio, are considered the earliest beneficiaries of an upswing. As a result, analysts and investors have turned more bullish and these companies have seen their stocks soar recently after hitting bottom post-Sept. 11.

Last week, an analyst at Salomon Smith Barney warned some media stocks have run up too sharply given the tenuous nature of the recovery.

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