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ViacomCBS Plunges Following Fiscal Fourth-Quarter Loss

In its first post-merger earnings reveal, ViacomCBS posts a fiscal fourth-quarter loss as tie-up costs offset stable revenue, prompting a share selloff.

Shares of newly minted media behemoth ViacomCBS  (VIACA) - Get ViacomCBS Inc. Class A Report plunged on Thursday after the company posted a fiscal fourth-quarter loss, as costs associated with its recent re-marriage failed to offset stable advertising revenue.

The New York-based media conglomerate said it lost $258 million, or 42 cents a share, vs. earnings of $887 million, or $1.44 a share, in the comparable year-ago quarter. On an adjusted basis, the company said it earned 97 cents a share, well below the adjusted $1.40 a share expected by analysts polled by FactSet.

The loss from continuing operations, which more accurately reflects merger-related expenses as well as operating items "expected to be mitigated through benefits of the combined company," came in at 44 cents. 

Revenue rang in at $6.87 billion, down from $7.09 billion a year ago and below analysts’ forecasts of $7.32 billion.

ViacomCBS Q4 Earnings graphic

“In less than three months since completing our merger, we have made significant progress integrating and transforming ViacomCBS," CEO Bob Bakish said in a statement. "In 2020, our priorities are maximizing the power of our content, unlocking more value from our biggest revenue lines and accelerating our momentum in streaming."

Consistent demand for its portfolio of streaming services including CBS All Access, Showtime OTT, Pluto TV, Noggin and BET+ and a new roster of Nickelodeon shows helped offset disappointing box-office numbers from "Terminator: Dark Fate," which dragged down Paramount’s top line, the company said.

Still, the ongoing "cord-cutting" among consumers - moving away from traditional cable-television content services and towards more piecemeal streaming channels and services - had an impact on the company's bottom-line results.

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From an audience perspective, higher investments in original content helped boost the company's audience base for other brands including MTV, BET and Comedy Central, and in turn advertising revenue.

Ad revenue also got a boost from the growing popularity of the company's direct consumer offerings, including and CBSN.

On the entertainment side, revenue came in at $3.13 billion, above analysts' estimates of $2.86 billion, driven mostly by domestic advertising. Publishing revenue, meantime, was $215 million, below the $222.6 million forecast by analysts.

Domestic streaming and digital video has already generated some $1.6 billion in annual revenue, the company said. 

"With this as a backdrop, we’ve set clear targets for the year and are providing increased transparency around our business to demonstrate ViacomCBS’ ability to create shareholder value today, as we continue evolving and growing our business for tomorrow," Bakish said.

ViacomCBS came into existence following the completion of the merger between CBS and Viacom in early December. ViacomCBS Class A and Class B shares began trading on the Nasdaq on Dec 5.

Shares of ViacomCBS were down 14.25%, or $5.63 a share, at $33.86 in morning trading on Thursday. 

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