ViacomCBS (VIAC) Q4 Earnings Lag Estimates, Revenues Down Y/Y

ViacomCBS (NASDAQ:VIAC) reported fourth-quarter 2019 adjusted earnings of 97 cents per share that missed the Zacks Consensus Estimate by 30.7% and declined 42% year over year.

Revenues of $6.87 billion also lagged the Zacks Consensus Estimate of $7.35 billion. The figure declined 3% year over year.

Adjusted OIBDA decreased 32% from the year-ago quarter to $1.16 billion.

Selling, general and administrative (SG&A) expenses increased 15.2% year over year to $1.49 billion.

Shares of ViacomCBS are down 8.6% in pre-market trading following the dismal fourth-quarter result.

Revenues by Type

Advertising revenues of $3.03 billion declined 2% year over year. While Domestic revenues declined 1%, International revenues fell 10%.

However, Affiliate revenues of $2.13 billion climbed 1% year over year. Domestic revenues grew 2%, while International revenues declined 8%.

Content Licensing revenues of $1.28 billion declined 11% year over year.

Publishing revenues fell 1% year over year to $215 million.

Theatrical revenues of $129 million decreased 13% year over year.

Other revenues fell 3% year over year to $83 million.

Segment Details

TV Entertainment revenues declined 1% year over year to $3.13 billion due to lower political advertising sales and content licensing.

TV Entertainment adjusted OIBDA decreased 13% from the year-ago quarter to $625 million.

Cable Networks revenues fell 2% year over year to $3.09 billion. Linear subscriber declines more than offset growth from OTT services.

Cable Networks adjusted OIBDA decreased 32% from the year-ago quarter to $792 million. The results reflect increased investment in programming and OTT services.

Filmed Entertainment revenues declined 14% year over year to $532 million. Adjusted OIBDA loss was $119 million, wider than the year-ago quarter’s loss of $77 million.

Balance Sheet

As of Dec 31, 2019, cash and cash equivalents were $632 million compared with $956 million as of Sep 30.

Net-term debt, as of Dec 31, was $18.09 billion compared with $17.21 billion, as of Sep 30.

Free cash outflow was $561 million in the fourth quarter against free cash flow of $391 million in the previous quarter.

Guidance

For 2020, ViacomCBS expects revenues to grow in mid-single digit.

Domestic Streaming & Digital Video revenues are projected to grow in the 35-40% range. Domestic streaming subscribers are expected to be roughly 16 million. Moreover, domestic Pluto TV MAUs are anticipated to be roughly 30 million.

Adjusted OIBDA is expected between $5.8 billion and $6.1 billion for 2020. Cost synergies are expected to be roughly $250 million.

Adjusted earnings are expected between $5.15 and $5.50 per share.

Moreover, adjusted free cash flow is expected to be $1.8-$2 billion.

Zacks Rank & Stocks to Consider

ViacomCBS currently carries a Zacks Rank #3 (Hold).

TEGNA (NYSE:TGNA) , Gray Television (NYSE:GTN) and Netflix (NASDAQ:NFLX) are some better-ranked stocks in the broader Consumer Discretionary sector. While TEGNA sports a Zacks Rank #1 (Strong Buy), Gray Television and Netflix have a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for both TEGNA and Gray Television is pegged at 10%, while Netflix is expected to grow at 30%.


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