- ViacomCBS misses analysts’ estimates for earnings and revenue in its first quarterly results following the merger.
- ViacomCBS posts $6.87 billion in revenue in the fourth quarter versus $7.36 billion expected.
- ViacomCBS makes 97 cents of earnings per share in the fourth quarter versus $1.44 expected.
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 3rd 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.