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ViacomCBS (VIAC) Q2 Earnings Top Estimates, Revenues Rise Y/Y
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ViacomCBS’ second-quarter 2021 adjusted earnings of 97 cents per share beat the Zacks Consensus Estimate by a penny but decreased 19.8% year over year.
Revenues of $6.56 billion beat the Zacks Consensus Estimate by 2.3% and increased 8% year over year.
Adjusted OIBDA decreased 25% from the year-ago quarter to $1.24 billion.
Selling, general and administrative expenses increased 23.3% year over year to $1.45 billion.
Advertising revenues of $2.09 billion increased 24% year over year, driven by CBS’ broadcasts of 2021 sporting events for which there were no comparable broadcasts in the prior-year period as a result of COVID-19, and an improved advertising market.
Affiliate revenues of $2.1 billion climbed 9% year over year, reflecting expanded distribution and higher reverse compensation and retransmission fees.
Global streaming & digital video revenues surged 92% year over year to $983 million, driven by 82% growth in streaming subscription revenues and 102% streaming advertising revenue growth.
Global streaming subscribers grew to 42.4 million, up 65% year over year. Subscriber additions in the quarter were led by Paramount+ streaming services.
Domestically, Paramount+ originals drove strong subscriber sign-ups and engagement. The top drivers of sign-ups included the new iCarly series, Infinite, UEFA Champions League, The Challenge: All Stars and Why Women Kill. Engagement reached an all-time high in the quarter, driven by Infinite, SpongeBob SquarePants, the new iCarly series, NCIS and The SpongeBob Movie: Sponge on the Run.
Internationally, Paramount+ launches to date have had strong momentum, led by its progress in Latin America. Paramount+ is set for launch in Australia and New Zealand in August and in key European markets, including the UK, Ireland, Italy, Germany, Switzerland and Austria in 2022 as part of the new Sky partnership.
SHOWTIME OTT delivered strong growth in sign-ups and engagement, driven by originals, including The Chi, Shameless and City on a Hill.
Global expansion and domestic growth helped global Pluto TV MAUs reach 52.3 million in the quarter and revenues surge 169% year over year, more than doubling for the fourth quarter in a row. Domestic watch-time per user grew 45% year over year.
Content-licensing revenues of $1.24 billion decreased 36% year over year. Theatrical revenues reported revenues of $136 million in the reported quarter due to the closure or reduction in capacity of movie theaters in response to the coronavirus.
Segment Details
ViacomCBS’ TV Entertainment revenues increased 23% year over year to $2.8 billion, which benefited from strong advertising and affiliate revenue growth. Moreover, CBS’ broadcast of the national semi-finals and championship games of the NCAA Tournament and professional golf tournaments aided growth.
TV Entertainment’s adjusted OIBDA decreased 45% from the year-ago quarter to $216 million due to increased investment in Paramount+ streaming services.
Cable Networks revenues of ViacomCBS increased 8% year over year to $3.47 billion driven by higher streaming, advertising and affiliate revenues, partially offset by lower licensing revenues.
In the second quarter, ViacomCBS owned most of the top 25 original cable series popular among viewers in the 18-34 years age group.
Cable Networks’ adjusted OIBDA declined 12% from the year-ago quarter to $1.12 billion, reflecting the benefit to 2020 from the domestic licensing of South Park and increased investment in content.
Meanwhile, Filmed Entertainment revenues increased 3% year over year to $667 million, primarily driven by current quarter theatrical releases, partially offset by lower licensing revenue.
Licensing and other revenues decreased 17% year over year because of lower home entertainment revenue as a result of the absence of theatrical releases due to coronavirus.
Adjusted OIBDA was $72 million, which decreased 38% year over year, reflecting distribution costs associated with current quarter theatrical releases and other anticipated releases later in 2021.
Balance Sheet
As of Jun 30, 2021, ViacomCBS had cash and cash equivalents of $5.37 billion compared with $5.49 billion as of Mar 31, 2021. ViacomCBS had committed $3.5 billion revolving credit facility that remains undrawn.
Total debt as of Jun 30, 2021 was $17 billion compared with $17.7 billion as of Mar 31, 2021.
Cash flow provided by operating activities was $51 million compared with $1.6 million provided in the previous quarter and $801 million provided in the year-ago quarter.
Adjusted free cash flow was $75 million compared with $1.7 billion in the previous quarter and $898 million in the year-ago quarter.
Key Q2 Developments
On Apr 5, ViacomCBS’ division ViacomCBS Networks International (VCNI) announced that it will acquire Chilevisión from WarnerMedia. The deal will strengthen and expand VCNI’s presence in the Southern Cone of Latin America by creating an aligned commercial, content and distribution strategy.
Zacks Rank & Stocks to Consider
ViacomCBS currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
ViacomCBS (VIAC) Q2 Earnings Top Estimates, Revenues Rise Y/Y
ViacomCBS’ second-quarter 2021 adjusted earnings of 97 cents per share beat the Zacks Consensus Estimate by a penny but decreased 19.8% year over year.
Revenues of $6.56 billion beat the Zacks Consensus Estimate by 2.3% and increased 8% year over year.
Adjusted OIBDA decreased 25% from the year-ago quarter to $1.24 billion.
Selling, general and administrative expenses increased 23.3% year over year to $1.45 billion.
ViacomCBS Inc. Price, Consensus and EPS Surprise
ViacomCBS Inc. price-consensus-eps-surprise-chart | ViacomCBS Inc. Quote
Revenues by Type
Advertising revenues of $2.09 billion increased 24% year over year, driven by CBS’ broadcasts of 2021 sporting events for which there were no comparable broadcasts in the prior-year period as a result of COVID-19, and an improved advertising market.
Affiliate revenues of $2.1 billion climbed 9% year over year, reflecting expanded distribution and higher reverse compensation and retransmission fees.
Global streaming & digital video revenues surged 92% year over year to $983 million, driven by 82% growth in streaming subscription revenues and 102% streaming advertising revenue growth.
Global streaming subscribers grew to 42.4 million, up 65% year over year. Subscriber additions in the quarter were led by Paramount+ streaming services.
Domestically, Paramount+ originals drove strong subscriber sign-ups and engagement. The top drivers of sign-ups included the new iCarly series, Infinite, UEFA Champions League, The Challenge: All Stars and Why Women Kill. Engagement reached an all-time high in the quarter, driven by Infinite, SpongeBob SquarePants, the new iCarly series, NCIS and The SpongeBob Movie: Sponge on the Run.
Internationally, Paramount+ launches to date have had strong momentum, led by its progress in Latin America. Paramount+ is set for launch in Australia and New Zealand in August and in key European markets, including the UK, Ireland, Italy, Germany, Switzerland and Austria in 2022 as part of the new Sky partnership.
SHOWTIME OTT delivered strong growth in sign-ups and engagement, driven by originals, including The Chi, Shameless and City on a Hill.
Global expansion and domestic growth helped global Pluto TV MAUs reach 52.3 million in the quarter and revenues surge 169% year over year, more than doubling for the fourth quarter in a row. Domestic watch-time per user grew 45% year over year.
Content-licensing revenues of $1.24 billion decreased 36% year over year. Theatrical revenues reported revenues of $136 million in the reported quarter due to the closure or reduction in capacity of movie theaters in response to the coronavirus.
Segment Details
ViacomCBS’ TV Entertainment revenues increased 23% year over year to $2.8 billion, which benefited from strong advertising and affiliate revenue growth. Moreover, CBS’ broadcast of the national semi-finals and championship games of the NCAA Tournament and professional golf tournaments aided growth.
TV Entertainment’s adjusted OIBDA decreased 45% from the year-ago quarter to $216 million due to increased investment in Paramount+ streaming services.
Cable Networks revenues of ViacomCBS increased 8% year over year to $3.47 billion driven by higher streaming, advertising and affiliate revenues, partially offset by lower licensing revenues.
In the second quarter, ViacomCBS owned most of the top 25 original cable series popular among viewers in the 18-34 years age group.
Cable Networks’ adjusted OIBDA declined 12% from the year-ago quarter to $1.12 billion, reflecting the benefit to 2020 from the domestic licensing of South Park and increased investment in content.
Meanwhile, Filmed Entertainment revenues increased 3% year over year to $667 million, primarily driven by current quarter theatrical releases, partially offset by lower licensing revenue.
Licensing and other revenues decreased 17% year over year because of lower home entertainment revenue as a result of the absence of theatrical releases due to coronavirus.
Adjusted OIBDA was $72 million, which decreased 38% year over year, reflecting distribution costs associated with current quarter theatrical releases and other anticipated releases later in 2021.
Balance Sheet
As of Jun 30, 2021, ViacomCBS had cash and cash equivalents of $5.37 billion compared with $5.49 billion as of Mar 31, 2021. ViacomCBS had committed $3.5 billion revolving credit facility that remains undrawn.
Total debt as of Jun 30, 2021 was $17 billion compared with $17.7 billion as of Mar 31, 2021.
Cash flow provided by operating activities was $51 million compared with $1.6 million provided in the previous quarter and $801 million provided in the year-ago quarter.
Adjusted free cash flow was $75 million compared with $1.7 billion in the previous quarter and $898 million in the year-ago quarter.
Key Q2 Developments
On Apr 5, ViacomCBS’ division ViacomCBS Networks International (VCNI) announced that it will acquire Chilevisión from WarnerMedia. The deal will strengthen and expand VCNI’s presence in the Southern Cone of Latin America by creating an aligned commercial, content and distribution strategy.
Zacks Rank & Stocks to Consider
ViacomCBS currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader consumer discretionary sector are WW International, Inc. (WW - Free Report) , CuriosityStream Inc. (CURI - Free Report) and NeoGames S.A. (NGMS - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CuriosityStream and WW International are slated to report quarterly earnings on Aug 10 while NeoGames S.A. is scheduled to report on Aug 11.