Viacom warned Wednesday that 2003 profits will be lower than expected due to continued weakness in local US ad markets.

The media mammoth – owner of broadcast network CBS, 39 local TV stations and the Infinity Broadcasting radio group – believes its profits will rise by a percentage in the low to mid-teens, compared with the mid-teens previously predicted. Revenues and operating earnings are also expected to be lower than formerly forecast.

The new figures reflect a less vigorous rebound in ad sales at local TV and radio stations than anticipated. “The economic recovery has translated into robust national advertising sales growth,” the company observed, “[but] the pace of recovery in local [markets] … is not as rapid.”

Viacom is highly exposed to fluctuations in advertising, from which it derives around 46% of its revenues. Other local broadcasters have warned that ad sales through to November will be flat to down on last year, when political spend helped maintain revenues.

However, Viacom is hardly struggling. It still expects 2003 to be a “record year” for both revenues and earnings, and is forecasting stronger local ad sales next year.

Data sourced from: Financial Times; additional content by WARC staff