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ViacomCBS Swings to Loss in First Report After Merger

Bob Bakish
Michael Kovac/Getty Images

Bob Bakish, President and CEO, Viacom Inc., participates in a panel discussion during the annual Milken Institute Global Conference at The Beverly Hilton Hotel on April 29, 2019 in Beverly Hills, Calif.

ViacomCBS, in its first earnings report since the recombination of Viacom and CBS Corp. in December, swung to a loss for its latest quarter, which included various deal-related and other charges, such as $468 million for restructuring and other matters, as well as $589 million in content-related writedowns.

The company was hit by disappointing box office, continued cord cutting, and difficult political advertising comparisons in addition to the charges in what it called a "transitional" quarter. It said that it was also affected by "operating items expected to be mitigated through the benefits of the combined company."

The stock sank in pre-market trading, losing 8 percent as of 7:55 a.m. ET.

The company, led by CEO Bob Bakish, reported a loss of $258 million for the merged company's fourth quarter (as ViacomCBS uses CBS' old fiscal year, which is the same as the calendar year, while Viacom's former fiscal year used to end in September), compared with earnings of $887 million in the year-ago period. The firm's loss from continuing operations amounted to $273 million, or 44 cents per share, compared with a year-ago profit of $884 million, or $1.43 a share.

The results fell short of Wall Street estimates. Quarterly revenue fell 3 percent to nearly $6.9 billion.

Paramount Pictures' quarterly results were hit by the underperformance of Gemini Man and Terminator: Dark Fate. It posted a quarterly loss of $119 million, compared with a year-ago loss of $77 million, as theatrical and home entertainment revenue each fell 13 percent and licensing revenue dropped 18 percent.

At the company's TV networks, affiliate revenue increased 1 percent in the fourth quarter "as strong growth in reverse compensation, retransmission and subscription streaming revenue more than offset declines in the pay TV landscape."

Domestic advertising revenue was "affected by significant declines in political advertising compared with the prior-year quarter," but domestic cable networks ad revenue grew 9 percent. 

The company recently unveiled that former NBCUniversal executive George Cheeks will join it in March as CEO of the CBS Entertainment Group, replacing former CBS Corp. president and acting CEO Joe Ianniello who has been serving as chairman of CBS Entertainment Group.

ViacomCBS late last year agreed to acquire a 49 percent stake in Miramax, which has a library of 700-plus titles, including Oscar winners like Pulp FictionChicagoScreamGood Will Hunting and No Country for Old Men, for $375 million in a deal with BeIN Media Group.

This article was originally published by The Hollywood Reporter.


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