ViacomCBS misses analysts’ estimates for earnings and revenue in its first quarterly results following the merger

ViacomCBS
revealed its first earnings report following the merger on Thursday that
highlighted a moderate hit to its financial performance in the recent quarter. The
downbeat results sent the company’s stock down in premarket trading on
Thursday.

The
American multinational media conglomerate finalized the merger last December
that marked its 3^rd attempt to merge since 2016. The move was
directed at competing well in the media market that is consolidating rapidly
and pose a greater challenge to the giants
like Netflix and Walt Disney.

ViacomCBS
To Launch A New Streaming Service

The
merger brought CBS News and Showtime networks on the same platform as Comedy
Central, Nickelodeon, and Paramount movie studios. ViacomCBS announcement on
Thursday also highlighted its plans of launching a dedicated streaming video
service that will be based on its current CBS All Access service. The company
said that the new streaming service will have free, paid, and even a premium
subscription package.

Before
launching its new streaming service, the company accentuated the annual revenue
from its digital video and domestic streaming unit at $1.6 billion.

According
to Refinitiv, analysts were expecting ViacomCBS to generate $7.36 billion in
net revenue in the fourth quarter. In terms of earnings per share, they had anticipated
$1.44 in the recent quarter. The quarterly performance results on Thursday,
however, posted a significantly lower $6.87 in revenue (3% lower) that the
company generated in Q4 while its EPS (earnings per share) was capped at a much
lower 97 cents.

ViacomCBS
Advertising Revenue Dropped 2% In The Recent Quarter

At
$3.03 billion in the fourth quarter, advertising revenue was reported 2% down
attributed to a decline in political ads that hit its revenue from domestic
advertisements. In its guidance for fiscal 2020, the company expressed
confidence that its net revenue will improve by a mid-single-digit this year. ViacomCBS
also declared that it now wishes to expand its annual savings to $750
million as compared to the $500 million target that was announced previously.

At
the time of writing, ViacomCBS is exchanging hands at $29.29 in the stock
market that translates to a 30% decline in 2020 so far. Its performance in 2019
was not reported any better either. Share prices were seen at around $44 in
January 2019 while the company closed lasts year at $41 per share. The $18.18
billion company currently has a price to earnings ratio of 3.80.