Viacom Stock Hit Hard As Q4 Revenues Weaken

Weak fourth-quarter results at ViacomCBS -- with 3% lower revenues -- sent investors running away in early Thursday trading of the company's stock, down sharply by 16% to $29.52. ViacomCBS posted its first earnings results as a merged company.

Confirming news of a broader streaming product, on its earnings phone call Bob Bakish, president/chief executive officer of ViacomCBS, said the company would launch a “house of brands" service, expanding on ViacomCBS’ existing CBS All Access.

This service would also include Viacom's free, advertising-supported digitally delivered pay TV service Pluto TV and Showtime streaming apps -- as well as content from MTV, Nickelodeon, Comedy Central, BET and Smithsonian in addition to Paramount Pictures films.

Overall Viacom revenues were down 3% to $6.9 billion, missing analysts' estimates. Viacom was 2% higher for the year overall, at $27.8 billion.

Richard Greenfield, media analyst of LightShed Partners, said on CNBC that cord-cutting issues are a continued concern for ViacomCBS, especially as the company looks to renegotiate for big sports franchises -- such as the NFL -- for its CBS Television Network.



“How do they financially justify big step-ups in NFL programming, as their revenue sources are declining?” he asks.

Viacom says affiliate revenue was up 1% in the period to $2.13 billion, and 3% for the year overall to $8.6 million.

While there was growth in reverse compensation, retransmission and subscription streaming revenue, there were declines in traditional pay TV revenues from cable, satellite, and telco operators.

Viacom did not disclose traditional pay TV performance in terms of subscribers or revenues.

ViacomCBS advertising revenue slipped 2% in the fourth quarter of 2019.-- but was 2% higher for the full year.

Total advertising for the fourth quarter was $3.03 billion, with all of 2019 at $11.1 billion.

Full-year results benefited from CBS’ airing “Super Bowl LIII” in 2019 as well as higher ad revenues the NCAA Division I Men's Basketball Tournament's national semifinals and championship games.

Viacom's domestic advertising was affected by heavy declines in political advertising compared to 2018, when the midterm elections took place -- sinking 1% $ 2.64 billion.

One positive was the growth in domestic advertising results at its cable networks -- up 9%. This came as international advertising declined 10% (and 14% for the full year).

Viacom posted bigger losses from content program sales -- down 11% to $1.3 billion due to “the timing and mix of deliveries.”

Its earnings press release said the content was looking to “unlock value” with content to “package TV and film to create new content licensing opportunities and better meet client needs.”

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