Viacom sees ad growth slowing in 2nd quarter

By Kenneth Li

NEW YORK (Reuters) - Viacom Inc expects slower U.S. advertising sales growth in the second quarter than the first quarter, Chief Executive Philippe Dauman said on Wednesday, and its stock fell 5 percent.

Domestic advertising revenue is forecast to grow 3 percent to 4 percent in the June quarter, comparable to the rate in the 2007 second quarter, he said.

In early May, Viacom had estimated second-quarter ad revenue growth at a similar rate to the first quarter's 7 percent rise.

"Right now, we're in an economically uncertain environment," Dauman said at the Bernstein Strategic Decisions conference. "We're preparing for that."

The early outlook on the second quarter exacerbated fears of an imminent advertising recession, which big media executives such as News Corp's Rupert Murdoch alluded to in the first quarter.

But Dauman said he did not see it that way. He said the slower growth rate is not due to pricing issues or signs of a broader weakness in advertising. Rather, it is due to weak spot market -- or short-term -- demand in specific categories, such as automotive advertising.

He also said he is pleased with the current discussions with advertisers following the annual upfront presentations, when cable and broadcast networks preview next season's television schedule and book ad sales.

"We feel very good momentum as we go forward," Dauman said.